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IR35 (Intermediaries Legislation)

IR35 (Intermediaries Legislation)


The ‘intermediaries legislation’ (also known as IR35) is not new. Its purpose is to ensure that individuals who work for a client through an intermediary, such as their own company, pay employment taxes in a similar way to employees, in circumstances where they would be employed were it not for the personal service company or other intermediary that they work through. Before 6th April 2017 the obligation to pay tax and NICs under these rules fell on the intermediary. Under the changed approach from 2017, public authorities became responsible for deciding if the rules applied and, if so, for the tax and NICs liability in respect of payments made to the worker’s intermediary. This means that the ‘fee payer’ is treated as the employer for tax and NIC purposes.

From 6th April 2021, the rules were extended to medium and large organisations in the private and third sectors and, additionally, there are a couple of new requirements, which means that public authorities already in scope will still need to be aware of the recent changes.


What is a public authority for the purposes of IR35 rules?

The definition of ‘public authority’ is broadly the same as that which applies to the provisions of the Freedom of Information Act 2000. In the context of schools and FE colleges this therefore includes:

  • The governing body of a maintained school / maintained nursery school
  • Pupil referral units
  • The proprietor of an academy
  • The governing body of an institution in the further or higher education sector.


What about independent schools?

Independent schools were out of scope until 6th April 2021 but now have to apply the same rules as the public sector (subject to the exemption for small companies).


What's in this topic area:

In this section you can access guidance and information on the IR35 rules (including the changed rules from April 2021) and how to use the HMRC tool, templates and tools which provides example letters to use as well as FAQs on the changes to the rules.

Use the links on the right to access all subtopics.

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