IR35: General - Question 13  

What is meant by 'client' for the purposes of the intermediaries legislation?

The 'client' is broadly defined at Section 49(1)(a) of Chapter 8 ITEPA 2003 as the person for whom services are carried out.

Section 49(1)(c) says that the legislation applies where, if the arrangements for providing services had been directly between the worker and the client, instead of via an intermediary, then the worker would have been treated as an employee of the client.

So, in deciding whether or not this legislation applies, the questions to be answered are:

1. who is the worker actually carrying out work for? This person will be a client for the purposes of this legislation
2. is the worker working for a client in such a way that, if engaged directly, they would have been an employee of that client?

In many cases, such as the commonly occurring worker - service company - agency - third party chain, the worker will be providing services for the purposes of all of the businesses in the chain. However, it is unlikely that the relationship between the worker and the agency would be employment. It is more likely that the relationship between the worker and the final client will be that of employment and therefore subject to the IR35 legislation.

The terms under which services are provided determine whether or not an engagement falls within this legislation. Section 49(4) of the legislation makes it clear that any contracts for the provision of services may only form part of the arrangements under which those services are provided, and that the full circumstances need to be considered before deciding whether or not this legislation applies to an engagement.

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