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IR35 – A Contractors Guide
The Government has decided to update the way that private sector contracting works, by changing the legislation, referred to as IR35.
How is assessment of a contractor’s status changing?
Assessment of IR35 status by the client
- Control: How much control does a client have on how a contractor works e.g. how, what, where and when?
- Substitution: Can the contractor send a substitute worker to carry out the work on their behalf, or is that individual worker needed.
- Mutuality of obligation: Is the worker obliged to accept additional work offered and is the client obliged to offer this work?
First Recruitment Group must then deduct income tax and national insurance contributions, changing a worker to PAYE or to an Umbrella company. This will mean that a contractor’s take-home pay is reduced. If the contractor is found to be ‘outside IR35’ they can continue to work through a Ltd Company/PSC model and not subject to paying these tax deductions.