IR35

Short Definition: IR35 is UK tax legislation designed to assess whether a contractor is genuinely self-employed or a disguised employee.

Long Definition: Introduced in 2000, IR35 ensures contractors working through personal service companies (PSCs) pay the appropriate income tax and National Insurance Contributions (NICs) if their work relationship mirrors employment. Contractors "inside IR35" are treated as employees for tax purposes, while those "outside IR35" are considered self-employed. This legislation applies to both private and public sectors, with the client determining the status in most cases.