The off-payroll working rules, commonly known as IR35, are among the most talked-about areas of UK employment tax. They are designed to ensure that individuals working like employees, but through their own company, pay broadly the same tax as employees.
What Is IR35?
IR35 applies where a worker provides services through an intermediary, usually a personal service company, but would be regarded as an employee if engaged directly. Where the rules apply, income is taxed much like employment income rather than company profits.
Who Decides Status?
For work in the public sector and for medium and large private sector clients, responsibility for assessing IR35 status sits with the client engaging the worker. Smaller clients are treated differently, so it is important to know which rules apply.
Getting Status Right
Status depends on factors such as control, personal service and mutuality of obligation. Careful, well-documented assessments help reduce the risk of disputes and unexpected liabilities under IR35.
How TaxDigit Can Help
Our Guildford-based team helps businesses and contractors navigate IR35 and the off-payroll rules. Contact us for clear, practical guidance.
IR35: UK-Wide Off-Payroll Working Support
IR35 and the off-payroll working rules affect contractors and engagers right across the United Kingdom, not just near our Guildford head office. TaxDigit helps personal service companies and the businesses that hire them UK-wide assess status and stay compliant.
Our chartered certified accountants review contracts and working practices, help with status determinations and manage the payroll consequences when a role is inside IR35. We support clients UK-wide, both remotely and from our Guildford office.
IR35 is rarely black and white. Status turns on the reality of the working relationship, including control, personal service and mutuality of obligation, rather than just the words in a contract. Getting a determination wrong can leave either the worker or the engager exposed to back taxes and penalties, so we look at both the paperwork and how the engagement actually operates before reaching a view.
How we help with IR35
- Assessing whether an engagement falls inside or outside IR35
- Reviewing contracts and actual working practices for status risk
- Supporting end clients with status determination statements
- Managing payroll and tax where a role is inside IR35
- Advising contractors on structuring genuinely independent work
HMRC explains the rules here: HMRC guidance on understanding off-payroll working (IR35).
Frequently Asked Questions
What is IR35?
IR35, or the off-payroll working rules, is designed to ensure that people who work like employees but operate through their own company pay broadly the same tax and National Insurance as employees.
Who decides IR35 status?
For most medium and large engagers the client decides status; for some smaller clients the contractor’s own company is responsible. Either way, the decision should reflect the real working relationship.
Can TaxDigit help if I am not based in Guildford?
Yes. We advise on IR35 and off-payroll working for clients UK-wide, remotely and from our Guildford office.