IR35, Employment and Self-Employment

These information pages and our Guidance Note: Employment, Self-employment and IR35 both cover certain legal aspects of working as a freelancer.

The Guidance Note suggests practical tips and recommends action, and it fully explains:

· differences in law between an employee and a self-employed person; and

· the impact of the tax anti-avoidance legislation known as the “IR35” rules on the use of a personal services company (“PSC”) by a person providing services to a business as a freelancer and also on a business which engages a freelancer who uses a PSC.

Even where a suitable self-employment/independent contractor agreement is used by a freelancer, or a freelancer uses a PSC which contracts with a client on the basis of a suitable agreement, there will still be a risk for client and freelancer that (for employment law or tax purposes) an employer-employee relationship might exist or that the IR35 rules might apply.

These pages only outline some of the key issues but the Guidance Note covers them more fully. We recommend you to read the Guidance Note after reading these information pages and then take legal advice as necessary before making any decisions, taking any action, or using any of our various template agreements in relation to engaging an individual or a company to provide any services to a business.

These pages incorporate the changes to IR35 rules that we expect to come into effect on 6 April 2020. No changes will take effect until then (and they will not have retrospective effect) but for convenience these pages state the position as if the expected changes were already in force. If, when they are enacted in March/April 2020, the changes differ from what we expect, we will promptly revise these pages and the Guidance Note if and as necessary.