Are the IR35 rules relevant to you?
You do not need to consider IR35 rules unless a PSC is involved so, to
determine whether a PSC is involved, it is important to understand:
· what amounts to a PSC for the purposes of IR35 – please see the Guidance
· that if your business engages an individual directly (not through a PSC)
or you are such an individual, IR35 cannot apply;
· however, although no PSC is used it will still be necessary to decide
whether if the individual is in law an employee (not self-employed). If
they are an employee, the business will have to operate PAYE; and
· if an individual works through some other type of entity (e.g. an agency
or managed service company), other rules - and not IR35 - will or might
It can be difficult to decide whether someone is a “disguised employee” for
IR35 purposes. HMCR’s view is not conclusive, but it provides a tool, the
Check Employment Status Tool
(“CEST”) that you can use to assess employment status. For more detail, see
the Guidance Note.
These IR35 pages relate only to IR35 and PSCs: if you are looking at a
managed service company (“MSC”), a composite service company, an employment
agency or an employment business, you should take legal advice and guidance
about tax, legal and other issues relevant to them.