IR35 – off-payroll working rules

HMRC's off-payroll working rules (generally known as IR35) aim to ensure that individuals are unable to gain a tax advantage by disguising employment as self-employment.

Under the rules, public sector organisations and larger private sector companies are responsible for determining whether an individual counts as employed or self-employed for tax purposes.

Misclassification can mean financial penalties for the individuals and organisations involved. 

MPs are not responsible for operating the IR35 legislation as they do not meet the relevant criteria. However, there are specific rules for tax purposes where individuals are engaged through an intermediary which MPs should be aware of.

There could be a significant reputational risk to MPs if these individuals (or intermediaries) are found to be non-compliant themselves.

We strongly encourage MPs to use the appropriate contractual arrangements and make use of IPSA contracts.

Any workers engaged via an intermediary will not benefit from the same terms and conditions as MPs’ staff.

If off-payroll workers are engaged, the MP should make sure that the worker and their intermediary are complying with relevant tax legislation in respect of the engagement.