IR35 Liability

IR35 legislation was introduced in April 2000 and was specifically targeted at individuals who are hired through their own service companies so that they can exploit the advantage offered by a corporate structure.

While describing the legislation as "somewhat confusing and inflexible" the high court have rejected claims that the change to the tax system is in contravention of European Free Trade and Human Rights legislation.

Provincial Payroll has been audited by HMRC as complying with IR35 regulations.

HMRC have been successful in bringing a significant number of cases to court, including those where contractors have gone without sick pay, holiday pay or appraisals. Judgements have been found against the individuals and in favour of HMRC on the grounds that the individuals have become integrated with their clients, and have been judged to be "Part and parcel of a clients firm, tantamount to an employee and therefore liable to be taxed accordingly".

Download the Provincial IR35 factsheet here

Details of IR35 legislation can be found on the HMRC website