IR35 status and the off-payroll rules

An inside IR35 determination attaches to one engagement, not to you, so closing the company is rarely the immediate answer. Keeping it dormant costs very little and preserves the route back to outside work. Closing earns its keep only where reserves are large and no outside pipeline is realistic, and the two year TAAR decides that.

The off-payroll working rules sit in Chapter 10 of ITEPA 2003 and shift responsibility for IR35 status from the contractor to the end client when that client is medium or large. This hub covers every aspect of the regime: what off-payroll working is, the public and private sector timelines, the small company exemption (with the updated 2025 thresholds), how the Status Determination Statement works, deemed direct payment mechanics, overseas clients, the April 2024 offset, and the self-assessment question about employment income from inside off-payroll engagements.

Receiving an inside IR35 Status Determination Statement does not mean the matter is closed. Under ITEPA 2003 s.61T, every contractor has a formal right to challenge the determination through the client-led disagreement process. This guide covers the evidence to gather, how to write a compelling representation, what the 45-day process involves, and why blanket determinations are a strong attack line.

When a contractor is caught by IR35, PAYE and National Insurance are collected through a deemed employment payment. Exactly how that calculation works depends on whether Chapter 8 or Chapter 10 of ITEPA 2003 applies, and the two regimes operate very differently. This guide sets out the mechanics of each, the key distinctions and what ultimately lands in your personal service company.

Under the off-payroll working rules, the fee-payer (not the end client) operates PAYE and National Insurance on inside-IR35 payments. But that liability can shift to the end client when an SDS is invalid, reasonable care was not taken, or debt-transfer provisions are triggered. This guide explains who the fee-payer is, when liability moves up the chain, and what the 2024 set-off rules mean for the cost of getting it wrong.

HMRC's Check Employment Status for Tax (CEST) tool, updated 30 April 2025, is the most widely used first screen for IR35 status. Used carefully and honestly, it generates an audit document HMRC will stand behind. But a CEST result is not a guarantee, and its treatment of mutuality of obligation is narrower than the case law, so contractors and clients who rely on it alone are taking a risk.

An inside IR35 day rate is not the money you keep. This guide works through the exact deduction order in 2026/27, from the assignment rate through employer NIC, employee NIC and income tax, with two full day-rate examples. It explains why the employer's costs come out of your rate, not your client's pocket.

Being caught inside IR35 does not just change your tax bill; it changes the entire mechanism by which you are taxed, from deemed payment calculations to employer National Insurance landing on your assignment rate. This guide explains exactly what happens to your income, what you can still claim, and whether staying in your PSC or moving to an umbrella is the right call.

A contract that reads well on paper can still put you inside IR35 if the working practices tell a different story. This guide walks through every clause that matters: substitution, control, mutuality of obligation, financial risk and the steps to take once you have a clean written contract.

Chapter 10 of the off-payroll working rules does not apply where the end client is a small company. Thresholds were raised in 2026 but the timing lag means most contractors should still assume their medium clients are in scope for 2026/27. This guide covers the current test, the two consecutive years rule, and the 6 April 2027 exit timing.

Every IR35 determination turns on three tests drawn from a 1968 court case and refined by a string of appellate decisions running up to the Supreme Court in 2024. This guide explains the framework structure, gives the control test the detailed treatment it deserves, and shows where the substitution and mutuality tests fit in.

Mutuality of obligation is the most misunderstood of the three IR35 status tests. The Supreme Court's 2024 ruling in PGMOL confirmed that MOO can exist within a single engagement and that finding it does not, by itself, settle status in favour of employment. This guide explains what MOO actually requires, how PGMOL changed the analysis, and why the CEST tool's treatment of MOO is narrower than the case law.

The off-payroll working rules (Chapter 10 ITEPA 2003) shift responsibility for IR35 status from the contractor to the end client when the client is medium or large. This guide explains how the Status Determination Statement works, who operates PAYE, the debt-transfer chain, and the April 2024 set-off that protects contractors from double taxation.

Operating outside IR35 through a limited company lets contractors extract income more efficiently than employment, but the arithmetic is specific. This page works through the full outside-IR35 money flow, from day rate to net take-home, using 2026/27 corporation tax and dividend rates.

Outside-IR35 status means you are classified as self-employed, keeping the tax-efficient benefits of a PSC and avoiding the deemed payment. Protecting that status requires evidence beyond contract wording, working practices that reflect genuine self-employment, and a clear understanding of what the client will assess.

Under the off-payroll working rules, a medium or large client must issue a Status Determination Statement for each engagement, reached with reasonable care and passed down the chain. This guide explains what makes an SDS valid, what happens when a client gets it wrong, and how to use the 45-day disagreement process to challenge a determination you think is incorrect.

A substitution clause in your contract is one of the strongest outside-IR35 indicators, but only if it is genuine, unfettered, and reflected in how the engagement actually runs. This guide explains what tribunals look for, how a sham clause can make things worse, and what you need to do to make substitution work for you.

IR35 is the set of UK tax rules that decides whether a contractor working through a limited company is really a disguised employee, and so should pay broadly employment levels of tax and National Insurance. This guide explains what the rules are, how the two regimes differ, the three tests that drive a status decision, and who actually makes that decision for 2026/27.