In summary, contractors who provide their work through personal service ‘companies’, known as ‘intermediaries’, may have to pay (or suffer, if their work is for an end-user operating in the public sector) Class 1 NICs even if they draw all their money by way of dividend. An intermediary may be not only a limited company owned by the worker but also a partnership, so even income that is nominally what is treated as trading income can be brought by the IR35 rules into income for Class 1 purposes.

The rules apply where:

an individual ‘worker’ personally performs, or is obliged to personally perform, services for a ‘client’;

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