|
|
|
|
|
 |
|
|
|
|
 |
Introduced
by the government in 1999,
IR35* tax legislation was
designed to eliminate the
avoidance of tax and National
Insurance contributions
(NICs) through the use of
intermediaries such as service
companies or partnerships. |
|
The
intention of IR35 (and subsequently
IR56) is to ensure that
if the relationship between
a contractor and their client
would have been one of employment
had it not been for the
introduction of an intermediary,
the contractor pays tax
and NICs on the same basis
as an employee of the client. |
|
Previously,
individuals could provide
their services to a client
company via an intermediary
such as a service company
enabling the client to make
payments to the company
without deducting PAYE or
NICs. The worker would then
receive the money from the
intermediary company in
the form of dividends instead
of a salary, thereby reducing
their NICs. |
|
IR35 = Inl and Revenue (Bulletin 35)* |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
