We understand that IR35 can be complex and confusing. The main difference with the new off-payroll working rules is that the decision of whether you should be taxed as a self-employed contractor/freelancer or an employee is down to the judgement of the end client.
For any assignments, you will be assessed by clients who will determine whether for tax purposes you are:
- Employed, meaning you are ‘inside IR35’
- Self-employed, meaning you’re ‘outside IR35’
If an assignment is deemed to be ‘inside IR35’, you may have some decisions to make about how you provide your services going forward. If you choose to work within IR35, you will have to pay PAYE income tax and NI in the same way an employee would. It’s worth noting that net take home pay is likely to be lower ‘inside IR35’ as an employee than ‘outside IR35’ under a self-employed model.
If you are a contractor operating through a limited company, PSC or other intermediary, we’d recommend speaking to your accountant about how IR35 might affect you when working for clients.