To prevent self-employed workers sidestepping PAYE and Class 1 NIC through payroll by simply working through a personal service company (PSC), the ‘IR35’ rules were introduced in 2000. The target was so called ‘disguised employment’. The rules were changed for public sector contracts in 2017, but are scheduled to be expanded again to many private sector contracts from 6 April 2020. The onus of compliance is, in these cases, moved from the PSC to the client, or to the agency making the arrangements and payments.

It is important to remember that even though the administration and responsibilities around off-payroll working have changed, the underlying rules for determining whether a worker is employed or self-employed have not. The distinction remains fundamental to the question of whether IR35 or off-payroll working rules should apply, as it is still aimed at combatting ‘disguised employment’.