IR35 and off-payroll working

IR35 guides for UK contractors

10 Guides in this section

2026/27 Tax year covered

UK Rules and case law

IR35 decides whether HMRC treats a contract as self-employment or as disguised employment, and the difference is worth roughly a fifth of your take-home pay. These guides cover how status is decided, who decides it, how to evidence an outside-IR35 position, and what to do if HMRC opens an enquiry.

All guides

IR35 guides and comparisons

Ten guides covering the rules, the tests and the practical decisions contractors face.

IR35 explained: the complete UK guide What IR35 is, who it applies to, how it changed in 2017 and 2021, and what it costs if you are caught inside. Start here IR35 status determination: how it works How status is decided, who is responsible for the determination, and how to challenge one you disagree with. Status IR35 in the public sector The off-payroll rules for public authorities, who makes the determination and how contractors are paid. Rules IR35 in the private sector How the 2021 reform shifted responsibility to medium and large clients, and the small company exemption. Rules IR35 contract review: what to check The clauses that matter most, why working practices beat paperwork, and when to pay for a professional review. Contracts The SDC test explained Supervision, direction and control: how the test works and what evidence supports your position. Tests IR35 business entity tests The historic business entity tests, what replaced them, and which indicators HMRC still weighs. Tests How to prepare for an IR35 investigation What triggers an enquiry, the records to keep, and how to respond if HMRC opens a review. Investigations Umbrella vs limited company Take-home pay, admin, expenses and risk compared, and when each option makes sense. Comparisons Best umbrella companies UK 2026 FCSA-accredited umbrella companies compared on fees, compliance record and service quality. Comparisons

Common questions about IR35

What is IR35 in simple terms?

IR35, formally the off-payroll working rules, is UK tax legislation designed to catch people who work like employees but bill through their own limited company to pay less tax. If a contract is judged to be "inside IR35", the engagement is taxed broadly like employment, with income tax and National Insurance deducted. If it is "outside IR35", the contractor can pay themselves through a mix of salary and dividends in the normal way.

Who decides my IR35 status?

It depends on the client. For public sector engagements, and for private sector engagements with medium or large clients since April 2021, the end client makes the determination and must issue a Status Determination Statement. Where the client is a small private company, the contractor remains responsible for assessing their own status.

What are the main tests for IR35 status?

Three factors carry the most weight. Control, meaning how much say the client has over how, when and where you work. Substitution, meaning whether you have a genuine right to send a qualified replacement. And mutuality of obligation, meaning whether the client must offer work and you must accept it. Supporting factors include financial risk, whether you provide your own equipment, and how integrated you are into the client organisation.

How much does being inside IR35 cost?

Most contractors lose roughly 20% to 25% of net take-home pay compared with an outside-IR35 engagement at the same day rate, because income is taxed as employment rather than through the salary and dividend route. The exact figure depends on your rate, expenses and pension contributions. Our take-home calculators let you model both positions.

Can I be inside IR35 on one contract and outside on another?

Yes. IR35 applies contract by contract, not to you as a person. It is common for a contractor to hold one engagement inside IR35 and another outside at the same time, and each must be assessed on its own facts and working practices.