The Intermediaries legislation commonly referred to as IR35 was introduced in 2000 to combat the perceived tax avoidance of workers using an intermediary (typically their own Personal Service Company (PSC)) to engage with the client rather than being engaged directly.

Prior to the IR35 legislation, where an individual was engaged ‘off-payroll’ and through a PSC, he or she could achieve employment taxes savings, while the engaging business also saved by not having to pay employers National Insurance Contributions (‘NIC’), currently at 13.8% or the Apprenticeship Levy of 0.5%, if applicable.