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Déjà vu?
Key points
- Original proposals for IR35 were set out in 1999.
- Changes were made so the intermediary had to decide whether to operate PAYE on a payment.
- Off-payroll working in the public sector in effect reversed the rule making the payer responsible.
- Those rules will be extended to private businesses even though problems remain with their implementation in the public sector.
On Budget day 1999 then chancellor of the exchequer Gordon Brown announced that measures would be introduced to stop the avoidance of tax and National Insurance contributions through the use of intermediaries such as personal service companies (PSCs) and partnerships in circumstances when an individual worker would otherwise be an employee of the client or the income would be income from an office held by the worker. The rules quickly became known as IR35 – the reference on the announcement.
The government was worried by the increasing use of PSCs. In particular it...
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