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ARTICLE · 11 NOVEMBER 2026

IR35 Compliance For Software Service Companies: B2B vs PSC

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IR35 is UK tax legislation that stops an individual from reducing tax by supplying services through an intermediary, such as a personal service company, where the true relationship is employment. A software service company that engages a contractor through a personal service company must consider whether IR35 applies to that engagement. The company’s size decides who carries that responsibility.

AustraliaCorporate/Commercial Law
Albert Cole
Albert Cole
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Summary

  • IR35 is UK tax legislation that taxes a contractor’s fees as employment income where they supply services through a personal service company but the underlying relationship is really one of employment.
  • Responsibility for assessing IR35 status depends on company size, with small companies leaving the decision to the intermediary and larger companies issuing a Status Determination Statement.
  • Where a contractor disputes a Status Determination Statement, the engaging company must consider the disagreement and respond within 45 calendar days, or it becomes the deemed employer for PAYE purposes.
  • This guide explains IR35 compliance for software service companies engaging contractors through personal service companies in the United Kingdom.

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