IR35 Status Assessment

Answer 5 key questions to assess whether your contract falls inside or outside IR35

⚠️ This tool gives an indicative assessment only. IR35 status depends on the specific facts of each engagement. Always seek professional tax advice for formal determinations.
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Common Questions

What is IR35?

IR35 (formally known as the off-payroll working rules) is HMRC legislation that targets contractors who work through a limited company (Personal Service Company) but operate like employees. If your engagement falls inside IR35, the fee-payer must deduct income tax and National Insurance from your gross fees, just as they would for a payroll employee. Outside IR35, you can pay yourself a mix of salary and dividends, which is typically more tax-efficient.

What are the financial consequences of getting IR35 wrong?

If HMRC determines you were inside IR35 and you paid yourself as if outside, they can demand all unpaid income tax and NI going back up to 6 years (20 years in cases of fraud). You may also face interest and penalties. The tax difference between inside and outside IR35 can be substantial — often 15–25% of your contract value — making accurate assessment critical.

What is a Status Determination Statement (SDS)?

An SDS is a written decision from a medium or large private sector client (or any public sector client) setting out whether they believe your engagement falls inside or outside IR35, with reasons. You have the right to challenge the SDS through a formal client-led disagreement process. If the client fails to provide an SDS, the tax liability shifts to them.

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Answer all questions and click assess to get your indicative IR35 status.

Key IR35 Factors

  • Substitution rights
  • Control over work
  • Mutuality of obligation
  • Financial risk
  • Part and parcel of client
  • Equipment provided
  • Length of engagement

HMRC Tools

What's included in this calculator

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Status Assessment

Key questions on substitution, control, and mutuality.

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Deemed Salary

Calculates the 5% allowance for operating costs.

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Inside vs Outside

Direct comparison of take-home pay for both statuses.

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Employer NI & Levy

Factors in the 15% NI and 0.5% Apprenticeship Levy.

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Fee-Payer Liabilities

Logic for public and medium/large private sectors.

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2025/26 Tax Bands

Uses the latest dividend and corporation tax rates.

Understanding IR35 and Off-Payroll Working

IR35 is the informal name for the off-payroll working rules contained in the Income Tax (Earnings and Pensions) Act 2003. These rules apply when a worker provides services through an intermediary (typically a limited company, also called a Personal Service Company or PSC) but would be treated as an employee if they contracted directly with the client. The rules are designed to eliminate the tax advantage of operating through a company in these circumstances.

Since April 2021, responsibility for determining IR35 status has shifted to the client (end-user) for medium and large private sector organisations, as well as for all public sector engagements. Small private sector clients (meeting at least two of: fewer than 50 employees, annual turnover not more than £10.2 million, balance sheet not more than £5.1 million) leave responsibility with the contractor's own company. Getting the status right matters for both parties — clients who make incorrect determinations can face liability for unpaid tax.

HMRC has its own Check Employment Status for Tax (CEST) tool, but professional advisers often note that it doesn't always produce results consistent with case law, particularly around mutuality of obligation. For high-value or long-running contracts, a formal IR35 review by a specialist tax adviser is strongly recommended, especially following any changes to the terms of an engagement.