HM Revenue and Customs has launched a new online tool to determine, for tax purposes, whether an individual is an employee or self-employed, and whether they might be covered by IR35. IR35 is tax legislation designed to combat tax avoidance by workers supplying their services to clients via an intermediary (usually a personal service company), but who would be an employee if the intermediary was not used.
Its launch comes in advance of new rules being introduced to the public sector in April 2017, which shift the responsibility for paying tax and national insurance (in relation to people who work via an intermediary) from the intermediary to the public sector end user or agency.
The online tool can be found here: https://www.tax.service.gov.uk/check-employment-status-for-tax/setup.
The tool asks a series of pre-programmed questions which change depending on the user’s responses. The service is anonymous, free to use and will not store any information entered or the result given. Users are able to print the results for their own records and HMRC states that it will stand by the result given by the tool unless a compliance check finds that the information provided was inaccurate or deliberately misleading.