IR35 CONTRACTOR AND FREELANCER GUIDANCE
IR35 is tax legislation designed to tax deemed or disguised employment as PAYE income. Disguised employment means the relationship of the contractor (e.g. you ) and end-client is one of employment and the personal service company or intermediary as it’s popularly called, is part of an arrangement which results in a tax advantage to the contractor.
If the relationship is one of disguised employment, HMRC can tax income of personal service companies as PAYE. HMRC wants to make sure that no one gets an unfair advantage by using an intermediary. Therefore, if the relationship is not one of employment, then the contract falls outside IR35; and if the relationship is one of employment, then the contract falls within IR35.