Apr 072008
IR35 was first propsed in 1999 and was introduced into UK legislation in 2000. The primary aim has been to prevent the avoidance of tax and national insurance by trading through an intermediary (commonly a limited company) rather than being an employee.
Prior to IR35, individuals could form a limited company and invoice their “client”/”employer” and then have their own limited company pay them a minimum salary and take the remainder as dividends. This avoided national insurance and tax through PAYE on the dividend element.
