Your Guide to IR35 & Contract Recruitment

If you engage contractors through limited companies, IR35 puts the responsibility for getting their tax status right on you. Medium and large private sector businesses must determine status, issue a Status Determination Statement and stand behind it.

Our client guide explains how the off-payroll rules work and who they apply to. It covers what a compliant SDS looks like and the true cost of inside versus outside engagements. It also explains how joint and several liability (JSL) can make you liable for unpaid tax anywhere in your supply chain.

Download your free copy for a clear introduction to IR35 and the key facts of engaging contractors compliantly.

FAQs

What is IR35?

IR35, or the off-payroll working rules, is UK tax legislation that makes sure contractors who would effectively be employees, if not for their limited company, pay broadly the same Income Tax and National Insurance as employees.

Who is responsible for IR35 status determinations?

In the private sector, the end client is responsible unless it qualifies as small. A business is small if it meets at least two of three criteria: turnover of no more than £15 million, a balance sheet of no more than £7.5 million, or no more than 50 employees.

What is a Status Determination Statement (SDS)?

An SDS sets out whether a contractor is inside or outside IR35 and the reasons why. The end client must give it to the contractor and every party in the supply chain, and have a process for handling disputes.

What is joint and several liability (JSL)?

Under JSL, businesses can be held liable for unpaid PAYE and National Insurance anywhere in their labour supply chain, including through umbrella companies they do not contract with directly.