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What is IR35?


Originally introduced in 2000, but reformed and updated in 2017, IR35 is a piece of legislation that closes a popular loophole related to full-time workers being on the books as freelancers to reduce the amount of tax they pay. While genuine contractors are considered 'outside' of IR35, being 'inside' IR35 means that for tax purposes, you're considered an employee of the business and subject to PAYE. We're covering the basics of how to stay on top of a brief that involves IR35, so you don't get caught out.

Understand the basics

As a recruiter, it's important you understand the significance of IR35, especially if you need to help a candidate liaise with the legal team. It's only natural for a candidate to want to complete their due diligence, ironing out all the details before they commit to a big life decision and part of that is likely to be how the offer fits with IR35.

When mediating between the clients, you'll need to interpret and paraphrase each parties concerns, this is difficult without at least a fundamental knowledge of IR35. It's also essential that you can judge whether a client's offering falls inside or outside IR35, it can greatly affect the way candidates approach an opportunity and you may waste each other's time if the candidate realises that the tax ruling doesn't suit them at a late stage.

Check each situation

HMRC has created a site to confirm how your candidate is affected by IR35, if you're not sure on the situation, ensure that you work through it together to guarantee there won't be any fines later down the road. It will be useful to remember this process when a contractor starts, so that you can let them know up front whether the job sits inside or outside of IR35.

It's important to stay informed on the legislation affecting your industry. It will speed up day-to-day operation and ensure that you're not inadvertently leading a client to breach the law. It also shows you have the initiative to tackle new problems as they emerge and demonstrate your drive to keep learning in your role.

If you're interested in an exciting career where you'll keep learning and be encouraged to push yourself, view our vacancies here.

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