CONTRACTORS AND IR35
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The Government introduced the IR35 rules to prevent companies laying off staff, only to take them on again in exactly the same jobs as contractors, so avoiding having to pay National Insurance and tax for them. This issue was impacting on the employment rights of the staff as well as becoming a tax loophole for companies, so the Government stepped in. IR35 stands for the “Intermediaries legislation” and it is a group of regulations set down by the Government which impact on tax and National Insurance contributions. In summary, if you employ someone as a contractor and they claim to be self-employed, but your contract is their only source of income and dictates when and how they work, then HMRC will deem them not to be self-employed but falling under IR35 instead. ZATRS can assist you with all matters relating to IR35 rulings so please contact us to find out more from expert accountants.