Essentially, IR35 will affect all contractors who do not meet the Inland Revenue's definition of 'self employment'., Those contractors who fall under the IR35 rules will be liable to Schedule E taxation and National Insurance (N.I), following deductions for expenses. Income will be in the form of a 'deemed payment', following these deductions.
There has been a lot of debate recently over substitution clauses in agency contracts, and whether they do indeed defeat IR35. In this article I will sum up the Revenue's thinking toward the subject, quoting directly from their employment status manuals.
Since the IR35 legislation was enacted in 2000, the finer details of employment law have become a subject of keen interest to many contractors. This article discusses the feature of employment contracts known as the Obligation of Personal Service.