What is IR35 and does it apply to me?
IR35 is the common name for off-payroll working rules. It applies where a contractor works through an intermediary but would be treated like an employee if engaged directly.
Last reviewed: 3 September 2026 · Editorial policy
Status is contract-specific
IR35 is assessed on the real working arrangement, not just the written contract. Control, substitution, mutuality of obligation, financial risk, equipment, and integration all matter.
Who decides
For many public sector and medium or large private sector clients, the client is responsible for determining status. If the private sector client is small, the contractor company may remain responsible.
Inside and outside IR35
“Inside IR35” means the engagement is treated as employment-like for tax under the off-payroll rules. The fee payer normally deducts Income Tax and employee National Insurance from the deemed direct payment and accounts for employer liabilities. This tax treatment does not automatically give the contractor employment-law rights.
“Outside IR35” means the off-payroll rules do not apply to that engagement. It does not remove the contractor company’s ordinary Corporation Tax, payroll, VAT or dividend obligations.
Who makes the decision and what you should receive
Public-sector bodies and medium or large private and voluntary-sector clients are generally responsible for deciding status. They should take reasonable care and issue a Status Determination Statement with reasons. For a small private-sector client, responsibility generally remains with the worker’s intermediary.
A worker or deemed employer can disagree with a client’s determination through the client-led disagreement process. The client should respond within the required period, either confirming the decision with reasons or issuing a new determination.
Look at the real engagement
No single phrase decides status. Review the actual right of control, personal service and substitution, financial risk, provision of equipment, integration into the client, exclusivity, payment basis and the wider business relationship. A substitution clause that could never operate in practice is weaker evidence than a genuine, usable right.
Repeat the review when the role, project or working practices change. IR35 applies contract by contract, so a conclusion for one client does not carry automatically to the next.
Use tools as evidence, not a label generator
HMRC’s CEST service can support a review if the questions are answered accurately and the working arrangement matches those answers. Save the result and the facts used. For borderline or high-value engagements, a contract review should examine both written terms and day-to-day practice.