IR35 is a piece of tax legislation introduced in July 2000 to target disguised employment. It uses a complex set of tests to find out if someone is genuinely in business on his own account or a disguised employee of the client.

In essence, IR35 simply says that if a worker is a disguised employee of the client then he/she should be subjected to the same tax and national insurance deductions as other regular employees. IR35 does not therefore affect those paying employed levels of tax (for example, umbrella workers) but does affect those running their own personal service companies (PSCs) and declaring dividends from company profit.

24 Month Rule

A workplace that an employee attends for the purpose of performing a task of limited duration or for some other temporary purpose is a temporary workplace. But there is a further rule that prevents a workplace from being a temporary workplace where an employee attends it in the course of a period of continuous work that lasts, or is likely to last, more than 24 months. Where this further rule applies the workplace will be a permanent workplace.

A workplace is a temporary workplace if an employee goes there only to perform a task of limited duration or for a temporary purpose. So even where an employee attends a workplace regularly, it will be a temporary workplace and so not a permanent workplace, if the employee attends for the purpose of performing a task of limited duration or other temporary purpose.


The Agency Workers Regulations (AWR) were introduced on 1 October 2011 to protect vulnerable temporary agency workers by ensuring that they benefit from the same basic pay and employment conditions as permanent employees.

An agency worker is entitled to access collective facilities and amenities from the first day of their assignment, such as the canteen, childcare facilities and transport services.

They're also entitled to equal pay and holidays after a 12 week qualifying period, i.e. if they've worked in the same role for the same hirer for 12 continuous calendar weeks (although there are many circumstances that pause, restart or continue the 12 week clock that we can advise on).

What does compliance mean to PayStream?
What does compliance mean to PayStream?