IR35 is a piece of government legislation created to help distinguish genuinely independent contractors from those who are essentially disguised employees.

Substitution, Direction and Control , Right of Substitution and Mutuality of Obligation are the principal referenced tests. When determining whether a worker is genuinely self-employed or a “disguised employee”, these key employment tests should be applied.

If you are inside IR35, your ‘fee payer’ is the party above your Limited Company (PSC) who is responsible for deducting national insurance and tax before paying you net earnings.

If you strongly disagree with your end hirers assessment of your IR35 status, one of our Business Advisory Team will request an IR35 review from the Brookson Legal team to help you challenge the decision.

There is lots of established IR35 case law, much of which specifically looks at whether an individual was a ‘disguised employee’ or not.

When IR35 was introduced in 2000, it was the contractor’s responsibility to determine their IR35 status. This was changed in 2017, when end hirers in the Public Sector became responsible for assessing a contractors IR35 status instead.

From April 2021, Private Sector hirers are responsible for assessing a contractor’s IR35 status. This responsibility previously sat with the Contractor.

No. The changes to IR35 legislation in effect from April 2021 affect who is responsible for assessments, not the way they are assessed.

CEST is an online tool HMRC have created to help companies establish whether or not a particular contract falls within IR35.

An SDS or status determination statement, is a document that summarises an end hirers IR35 assessment for a specific contractor. It determines whether they fall inside or outside IR35, and therefore how they will be paid and taxed.