What is IR35? IR35 Explained
What does "Inside IR35" mean?
A contractor with an "inside IR35" status is deemed an employee. This means they are for tax purposes only to be treated as an employee and client. The party responsible for paying the tax will depend on whether the client is public or private and the client organisation's size.
More detail
"Inside IR35" refers to a situation where an individual providing services through an intermediary, such as a personal service company (PSC), is considered an employee for tax purposes according to the UK's IR35 legislation.
As a result, the contractor or client, depending on which legislation applies, must operate and collect income tax and National Insurance Contributions (NICs).
If the original legislation applies, the contractor is responsible for determining the IR35 status and paying the taxes. If the more recent rules apply, then the client is responsible for determining the IR35 status of the contractor and ensuring that the correct amount of tax is paid.
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