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IR35

Zuraida Curtis

Editor's message: The Government introduced reforms to the operation of IR35, bringing the requirements in the private sector in line with those already in the public sector.

IR35 (also known as the "intermediaries legislation") is likely to apply where an individual provides their services to a client via an intermediary such as a personal service company (an arrangement known as "off-payroll working"), but the relationship with the client would otherwise suggest employment status. Previously, if IR35 applied, the intermediary had to operate PAYE and deduct income tax and national insurance contributions on salary paid to the individual.

Since April 2017, where the client receiving the off-payroll workers' services is in the public sector, and 6 April 2021 where the client is in the private or not-for-profit sector (and depending on its size), it has responsibility for operating IR35 and deciding the individual's status and, if it is the fee payer, it must make PAYE deductions.

The Government announced its intention to repeal the 2017 and 2021 reforms on 23 September 2022. However, on 17 October 2022, it announced that it would not go ahead with the repeal.

Zuraida Curtis, senior legal editor, employment law and compliance

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HR and legal information and guidance relating to IR35.