Many people supply their services to clients, not directly as a self-employed person, but through an intermediary company. The tax and NICs advantages of this way of working can be significant. Since April 2000, anti-avoidance legislation, known as 'IR35', has targeted individuals using this structure who might otherwise be regarded as employees.

The intention of IR35 is to collect roughly the same tax and NICs as would have been paid if the individual was employed directly by the client. However, IR35 shifts the obligation to pay the tax and NICs onto the service company rather than the client.

This guidance note, taken from the Owner-Managed Businesses module of TolleyGuidance, covers how to calculate this deemed employment payment. TolleyGuidance is a practical, tax technical service with guidance notes, templates and work-flow tools to make your job easier.

Download the full guidance note