Guidance Note on Employment, Self-employment, and IR35

This Guidance Note on Employment, Self-employment, and IR35 explains the key legal differences between an employee and a self-employed person, and outlines how the IR35 rules can affect the use of a personal services company (PSC) where a person provides services to a business.

It should be read alongside These Employment, Self-employment and IR35 Checklists, which supplement this Guidance Note and help you work through the relevant questions when assessing the likely legal nature of a particular working arrangement.

IR35 changes from 6 April 2021

Section C takes full account of, and explains, the amendments to the IR35 legislation (effective from 6 April 2021) made by the Finance Act 2020. Those changes were made entirely in line with the Government’s previous proposals.

If those changes do or might affect you, we strongly recommend that you follow the steps suggested under paragraph 5 of Section C (“Impact of changes to IR35 on your business and action needed now”) and take professional advice to cater for the changes.

Use this Guidance Note to choose the right agreement

We recommend reading this Guidance Note before deciding which of the available template agreements is most suitable when engaging an individual or a company to provide services to your business.

What the Guidance Note covers

• Why it is important, for tax and employment law purposes, to consider whether a person is in law an employee or a self-employed individual.
• How to decide whether a person is an employee or a self-employed individual.
• Whether the IR35 rules apply where you engage a worker through an intermediary company.

Guidance Note on Employment, Self-employment, and IR35 is part of Business . Just £38.50 + VAT provides unlimited downloads from Business for 1 year.