Understanding IR35 and Its Impact on Contractors in the UK
The IR35, or “Intermediaries Legislation,” is a tax regulation in the United Kingdom that has significant implications for contractors and freelancers. Understanding IR35 is essential for anyone working as an independent contractor in the UK. In this article, we’ll deep dive into IR35 and its impact on contractors . What is IR35? IR35 Legislation was introduced by the UK government to tackle tax evasion by individuals who provide their services to clients through an intermediary, like a limited company, but would be employees if the intermediary was not in place. The legislation was first introduced in 2000 and has undergone various updates since then. The legislation primarily focuses on determining whether a contractor is genuinely self-employed or if they should be classified as an employee for tax purposes. This classification influences the tax liabilities of both the contractor and the client. Who does IR35 have an impact on? IR35 impacts contractors who operate through an int