IR35 is a legislation which aims to ensure disguised employment is treated the same way as regular employment for tax purposes.

It impacts contractors who use limited companies to work for other organisations. If they are deemed to essentially have the same working conditions and obligations as regular employees they will also be treated and taxed as such.

Changes are coming into force in April 2021 which require the hiring organisations to determine whether someone falls ‘inside IR35’ (i.e. effectively is an employee), instead of having the contractor self-determine as before.

This means many contractors previously working through their limited companies will now be treated as regular employees.

See also our more in-depth article on IR35 in our blog post.

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