IR35 UK: Legislations Explained
For companies in the UK, the responsibility of classifying workers remains. The latest decision around the region’s off-payroll working rules (IR35) is that businesses will still need to decide whether a contractor is really an employee or not, pay the tax, and where appropriate, contribute towards the worker’s national insurance.
Historically, contractors were in charge of determining whether they would be taxed as an individuals or as a company. In 2020, the IR35 dictated that the business (or client) would need to determine the worker’s correct tax status. For many businesses, that meant and still means they’re at risk of misclassification and the consequences that come with it.
Knowing the legislation around IR35 tax changes will help companies legally protect themselves and understand how much resources they can and need to devote to classifying workers. We’ll take you through the IR35 legislation, what it means, what it looks like in practice, and how it can impact your business.