The contractor vs employee distinction is crucial for UK tax compliance, as HMRC's IR35 rules determine whether contractors must pay employment taxes or can benefit from corporation tax rates, significantly impacting take-home pay and affecting how single director limited companies structure their accounting and business operations.
Written by Jordan MaceyMAAT
Contractors can be self-employed, a worker or an employee. Those who are employed through an umbrella company or an agency could be considered a worker or an employee.
If a contractor is a sole trader or runs a limited company, he or she will then be considered a self-employed person.
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