IR35 Net Extended To Catch Office Holders

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June 25th 2022
Tax Week 12
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IR35 Net Extended To Catch Office Holders

Amendment to current IR35 provision for office holders confirmed in yesterday's Budget.

Buried within the budget report is confirmation that HMRC's IR35 net will include people working for a client as an office-holder.

This includes when:

  • The individual is appointed to perform duties of an office.
  • The individual is appointed by an intermediary as a corporate office-holder to perform duties of that office.
  • The individual is both an office-holder and performs other duties, which if they were employed directly would make them an employee, such as directors who are also CEO.

IR35 determines whether an individual is self-employed or employed for tax purposes. By changing, or declaring a different status, tax and NI bills can be reduced.

An office-holder is an individual appointed to a position within an organisation without a contract or regular payment, but HMRC feel people in a position such as this are attempting to avoid tax and NI contributions by declaring themselves as self-employed via their own Personal Service Companies.

The new legislation, which will be effective as of this April, first became apparent when people working in the BBC (and in Senior Government Offices) were using Personal Service Companies for remuneration, whilst being office-holders within the organisations they worked.

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