A few of our members have recently asked us about IR35 and how it applies to them. We have put together the following information about IR35 in response to your questions and for any further assistance.
What is IR35?
“IR35” has no legal meaning but is commonly referred to as shorthand for considering tax responsibilities and obligations in the following circumstances:
- An individual personally performs services for a client (or is obliged to do so).
- Those services are provided under arrangements involving an "intermediary". For example, an agency whom you perform work on behalf of and then collect payment directly from.
- The circumstances are such that if the arrangements had been directly between the individual and the client, the individual would have been regarded as "employed" by the client for income tax purposes.
The purpose behind IR35 is to combat perceived tax avoidance by individuals and companies who seek to reduce their tax liability by providing their service through a limited company, partnership or another individual.
In simple terms, the rules will apply if a member provides their services to another member through an intermediary but would be classed as an employee if they were contracted directly.
For official guidance and further information please follow this link.
How IR35 applies to your relationship with CX/HX/Transport Exchange Group
In short, it doesn't. We provide a platform, the Exchange does not act as a contractor nor an “intermediary”. As a member of the Exchange, you don't perform services for us, making the IR35 non-applicable in relation to the work we do.
However, that does not mean that you should not carefully consider whether IR35 may apply in relation to the services provided between members. On most occasions, it is highly unlikely that IR35 will apply if you accept a one-off booking from another member.
However, our suggestion is that you review the guidance and carefully consider how it applies to you. If you are unclear whether IR35 applies, we recommend that you check here and if still unsure seek professional guidance from either your accountant or a solicitor.