IR35

IR35: History and Overview

Written on September 7, 2020 by Jonathon Webley

If you are an IT contractor then you will be well aware of what IR35 is – it is the word used to describe two sets of tax legislation which are designed to combat tax avoidance by contractors and the firms employing them.  Specifically, those contractors who supply their services to a client via an intermediary, such as an umbrella company, but who would actually be classed as an employee if the intermediary was not used.

IR35 legislation was first introduced back in 1999 and came into force in April 2000, and has meant that HMRC can now tax some contractors as though they were employees – meaning those contractors now pay significantly more tax than they did in the past.  However, since the introduction of the Office of Tax Simplification (OTS) in 2010, a number of amendments have been made to the IR35 legislation in a bid to improve its effectiveness.

Let’s take a closer look at some of the key events in the history of IR35 so far:

For any further information on IR35 please email our managing director, Jonathon Webley, at j.webley@agilerecruit.com