IR35 is the common name for a piece of legislation which came into force in April 2000. This legislation deals with individuals who work through a personal services company who may otherwise be deemed employees of the end client. Its purpose is to force these individuals to pay income tax (PAYE) and national insurance (NI) at rates comparable to ‘normal’ employees. Under the legislation, the onus is on the director of the personal service company to decide whether a contract “passes” or “fails” IR35. For any contract that “fails”, tax and NI is calculated according to the IR35 rules.

The IR35 status of an individual is determined on an assignment by assignment basis by a combination of the contractual conditions in place with the agency and/or end client and the working practices operating on the ground. Because it’s a grey area, it’s important that both the contractual and practical arrangements are appropriate if you wish to “pass” IR35.

The way an agency implements the Conduct Regulations may have an impact on working practices and thus on an individual's IR35 status. Osirian has established procedures to avoid this.

Further information

Osirian’s legal adviser, Rebecca Seeley Harris, is a leading specialist on the
Regulations and IR35. She has prepared the following contractor guidance:

IR35 Contractual issues
IR35 Working Practices