You may have come across the IR35 in the press or heard the recent hype in the UK about it. So, here’s what the IR35 means in a nutshell… What is IR35?  ‘IR35 is a word used to describe two sets of tax legislation that are designed to combat tax avoidance by workers, and the firms hiring them, who are supplying their services to clients via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used.’ –contractor calculator. There are two types of contractors. Contractors are freelance employees who are not employed as “employees” but rather as “freelance” or “contractor”  by a company. An individual will be aware of their employment basis as stipulated in their Contract of employment. The difference between ‘contract workers’ (or ‘freelance workers’) is how they pay tax. There are several ways to do this: A. Work under an umbrella company who calculate your tax for you. Umbrella companies employ workers who are on fixed term contract assignments. Essentially, they are intermediaries between yourself – a contractor – and your end client or agency. Your agency (employer) pays the umbrella company, who then pay you, the contract ...

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