According to Wikipedia, IR35 refers to the United Kingdom’s anti-avoidance tax legislation designed to tax ‘disguised’ employment at a rate similar to employment.
In this context, “disguised employees” means workers who receive payments from a client via an intermediary, for example, their own limited company, and whose relationship with their client is such that had they been paid directly they would be employees of the client.
Before IR35, freelancers owning their own limited companies were allowed to receive payments from clients directly to the company. According to the new changes, coming into force on 6 April 2021, all public sector clients and medium or large-sized private sector clients will be responsible for deciding the workers’ employment status. And depending on the status, the fees will be subject to tax and National Insurance contributions.
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