Employed or self employed what's right for you?
These Guidance Notes provide an outline of the relevant provisions, but they are not comprehensive and should not be relied on as authoritative.
Over the last few years there has been a substantial increase in the number of people who are 'self-employed', and in the number of companies being used by individuals to provide services to clients, which has resulted (in the view of Her Majesty’s Revenue and Customs [HMRC]) in incorrect deduction of Income Tax and avoidance of National Insurance Contributions. To counter this HMRC has over the years introduced a number of measures, including legislation commonly known as IR35 relating to ‘intermediary companies’. This is anti-avoidance legislation which targets perceived avoidance of tax and National Insurance where, but for the existence of the company, the worker would be an employee of the client. The purpose of this legislation is to try to establish the status of the contractor as that of an employee, and hence subject to Income Tax and National Insurance being deducted under PAYE arrangements. Over the years the rules and the case law on this issue have become more complex, and HMRC continues to propose further changes and refinements.