Employment
IR35
Constantine Law advises on employment status issues, every week. We are one of the main firms in the country advising employment agencies and temporary workers. Constantine Law is a member of APSCO and has appeared in a recent Court of Appeal case on employment status. John Hayes has delivered ELA’s only evening session on IR35.
What is IR35?
IR35 is a set of tax rules aimed at stopping individuals from avoiding income tax and National Insurance contributions (NICs) by working through an intermediary, usually a personal service company (PSC), when they are, in effect, working like an employee.
Under IR35, the intermediary must assess each contract to decide whether the worker would be considered an employee of the client if the PSC didn’t exist. This is known as a status determination.
If the worker would be classed as an employee, the PSC must treat the income received as deemed salary, regardless of whether it’s paid out as dividends or kept in the company. Tax and NICs are then calculated at the end of the tax year, with certain deductions allowed (such as salary already taxed through PAYE).
Why IR35 Matters
HMRC introduced IR35 to tackle arrangements where individuals work through PSCs mainly to reduce tax, particularly employer NICs, rather than because they are genuinely self-employed.
Who is Responsible?
Since 6 April 2021, the responsibility for determining IR35 status shifted to the end client in the private sector (unless they qualify as a small company). This means medium and large businesses that engage contractors through PSCs must now assess whether those contractors fall within IR35.
How We Can Help with IR35
At Constantine Law, we offer expert legal support to help businesses and individuals navigate the complexities of the IR35 regime. Whether you're an end-user engaging contractors or a contractor operating through a personal service company (PSC), our team provides clear, practical advice tailored to your needs.
Our IR35 Services Include:
Status Determination Reviews
We assess working arrangements and contracts to determine whether they fall inside or outside IR35, helping you understand your obligations and risks.
Drafting and Reviewing Contracts
We prepare and review consultancy agreements and related documentation to ensure they reflect genuine self-employment and minimise IR35 exposure.
Support for End Clients
Since the 2021 reforms, medium and large private sector organisations are responsible for determining IR35 status. We assist with:
Preparing compliant status determination statements (SDS)
Advising on reasonable care obligations
Implementing robust internal processes for engaging contractors
Advice for Contractors and PSCs
We help contractors understand their IR35 position, manage risk, and respond to HMRC enquiries or disputes.