The IR35 rules are otherwise known as the Off-Payroll Working Rules. They apply to individuals who provide services to a company through an intermediary (normally a personal service company).
These individuals are often called ‘disguised employees’ and ensure that those individuals pay the same income tax and national insurance as regular employees.

• Annual turnover is more than £10.2 million
• Balance sheet total is more than £5.1 million
• More than 50 employees

IR35 was introduced to tackle the problem of ‘disguised employees’, who weren’t paying the correct level of tax.

Not necessarily – if you are a legitimate contractor, with multiple clients and you are genuinely a service provider for an organisation, then the IR35 rules likely will not apply to you, and you can still operate as a contractor.

If you are a contractor that operates through a limited company, for only one client, or you are, in reality, an employee of your client, you will likely to be treated as an employee for tax purposes. This means that your client will have to start holding back income tax and national insurance from your fee.

Umbrella companies do not ‘solve the IR35 problem’. If you work as an employee for an umbrella company, you will be treated as an employee, and will pay income tax and national insurance at the source.
If you work through your own limited company, via an umbrella company, but you fall within the IR35 rules, you will also be treated as an employee, and taxed accordingly.

HMRC carries out 250 new IR35 investigations in every tax year. They can investigate anyone, and do so on a risk-based assessment.