IR35, in plain English — and what we actually do about it.
The off-payroll rules decide whether a contract gets taxed like employment. Get it wrong and the bill lands on somebody — usually the client. Here's what it means, who decides, and how this platform documents it. No jargon, no scaremongering, and no pretending it's simpler than it is.
General information, not tax or legal advice. IR35 is genuinely complicated, it turns on the specific facts of each engagement, and the rules and thresholds change. Nothing on this page is a substitute for advice from a qualified accountant or employment-status specialist, and you shouldn't make a determination based on it alone. Where we describe our own process, that's what we do — not a guarantee of your tax position.
IR35 asks one question: if the limited company weren't there, would this look like a job?
That's genuinely the whole idea. The off-payroll working rules exist because someone doing what is, in substance, an employee's job shouldn't pay materially less tax simply by invoicing through their own company. So HMRC looks past the contract at how the work actually happens — and asks whether, stripped of the paperwork, this arrangement looks like employment.
Why it matters to a business
Since April 2021, if you're a medium or large private-sector client, you are usually the one who must decide the status of each contractor you engage — and if you get it wrong, the unpaid tax and National Insurance can come back to you, not to them. That's a real liability, and it's why some businesses over-correct and refuse contractors entirely. That's an overreaction: plenty of genuine contract work sits legitimately outside IR35. It just has to be assessed properly, role by role.
Why it matters to an IT Manager
It changes your take-home pay, sometimes substantially. Outside IR35, you operate through your own company and manage your own tax. Inside, deductions are made at source and you're taxed broadly like an employee — without gaining employment rights in return, which is the part most contractors find genuinely unfair. It's why so many IT Managers filter for outside-IR35 roles, and why being upfront about your position saves everyone a wasted conversation.
The practical difference
Neither is “good” or “bad” — a status is a description of the working arrangement, not a judgement on it. What matters is that it reflects reality.
| Outside IR35 | Inside IR35 | |
|---|---|---|
| In substance | A genuine business-to-business service. You're engaged to deliver an outcome. | Employment-like. You're engaged to work under direction, much as an employee would. |
| How you're paid | Your limited company invoices the client. You manage your own tax and NI. | Tax and NI are deducted at source before you're paid, broadly like payroll. |
| Take-home | Typically higher for the same headline day rate. | Typically lower for the same headline rate — which is why inside roles often quote more. |
| Employment rights | None — you're running a business and carrying the risk that goes with it. | Still generally none, despite the tax treatment. This is the sore point. |
| Typical of | Defined project work: a migration, a build, an audit with a clear finish line. | Ongoing BAU cover, interim roles slotted into the org chart, managing an internal team day to day. |
| Who's exposed if it's wrong | For medium and large private-sector clients, liability for an incorrect determination generally sits with the client (and can pass along the supply chain). For small clients, responsibility generally stays with the contractor's own company. | |
Since April 2021, it's usually the client — not the contractor.
This is the single biggest thing businesses get wrong, so it's worth being precise about it.
If you're a medium or large client
You must assess the status of each engagement and issue a Status Determination Statement — a written decision, with your reasoning, given to the contractor and to anyone else in the chain. You also need a process for the contractor to challenge it, and you have to respond.
Crucially, it must be role by role. A blanket “all contractors are inside” policy applied without assessing individual engagements is exactly the behaviour HMRC has criticised, and it also costs you the best contractors, who will simply work elsewhere.
If you're a small client
There's an exemption. Where the client qualifies as small, the responsibility for determining status generally stays with the contractor's own limited company, as it did before the reform.
“Small” is defined by reference to company-size tests in the Companies Act — turnover, balance-sheet total and employee numbers. Those thresholds have been revised in recent years, so please check the current figures with your accountant rather than relying on a number you half-remember (or one on a marketing page like this one).
HMRC's CEST tool is a starting point, not a shield. It's free and it's useful for structuring your thinking, but it produces an undetermined outcome in a meaningful share of cases, and its answer is only as good as the inputs you give it. Keep your reasoning and evidence — and for a borderline role, get a specialist to look at it. The cost of proper advice is trivial next to the cost of getting it wrong across a dozen engagements.
Three questions do most of the work
Status is decided on the whole picture, and no single factor settles it. But in practice most determinations hinge on these three — and on what actually happens day to day, not what the contract claims happens.
Control
How much say does the client have over what you do, how you do it, when and where? A contractor engaged to deliver a defined outcome, using their own judgement, points outside. Someone told what to do each morning, managed like staff, points inside.
Substitution
Could you genuinely send a suitably qualified replacement in your place? A real, usable right of substitution points strongly outside. A clause that exists on paper but that everyone knows would never be accepted in practice counts for very little.
Mutuality of obligation
Is the client obliged to keep offering work, and are you obliged to keep accepting it? An ongoing expectation of continuous work looks like employment. A defined engagement that simply ends when the deliverable is done does not.
Other factors matter too — whether you're part and parcel of the organisation, whether you carry financial risk, whether you provide your own equipment, whether you work for other clients. It's the overall picture that counts.
What we actually do about it
We can't make your determination for you — legally, that's yours. What we can do is make sure nobody wastes time on a mismatch and that the paper trail exists.
Status is visible up front
Every IT Manager states their position — outside, inside, or either — and you can filter the directory on it. Employers self-select, contractors don't get approached for roles they'd never take, and nobody discovers the mismatch at offer stage.
Briefs carry a status too
When you post a project you tell us how you expect to engage. The match engine weights it, so an outside-only contractor isn't ranked against an inside role. It's a small thing that removes a lot of wasted conversation.
Documented on every engagement
Contracts are issued through the platform and each engagement records its stated status, so there's a clear trail rather than a vague email chain from eight months ago. Right-to-work evidence is collected and stored alongside it.
The honest limit
We are not your accountant, and a marketplace cannot make a status determination on your behalf. For medium and large clients the decision and the liability are yours. We'll give you structure, records and a filter — you should still take advice on anything borderline.
IR35, answered
No — it's a description, not a criticism. Plenty of legitimate work is genuinely inside: interim cover slotted into your org chart, ongoing BAU management of an internal team, a role where you direct the person's day-to-day work. None of that is wrong, and contractors take inside roles all the time. What causes problems is a status that doesn't match reality — an “outside” contract for someone who is, in practice, being managed like an employee. The goal isn't to get to outside; it's to be accurate, and to price the role accordingly, since inside roles usually need a higher headline rate to land the same take-home.
You can, and some businesses did exactly that when the rules changed — but it's a poor answer for two reasons. First, blanket determinations made without assessing individual engagements are precisely the behaviour HMRC has objected to; the rules require reasonable care on each engagement, and a policy applied without thought isn't that. Second, it's commercially self-harming: the strongest IT contractors have options, and they'll take the client who assessed the role properly over the one who didn't bother. You lose access to the top of the market to avoid an assessment that usually takes an hour.
For medium and large private-sector clients, liability for an incorrect determination generally sits with the client, and can move along the supply chain to whoever failed to meet their obligation. If the client qualifies as small, responsibility generally remains with the contractor's own company. There have also been changes allowing tax already paid by the contractor and their company to be offset against a client's bill in some circumstances, which reduces the sting of the old double-taxation problem — but it doesn't remove the exposure. Because this is exactly where the money is, it's the part worth paying an adviser to get right.
It changes the problem rather than removing it. With an umbrella, the contractor is employed by the umbrella company and paid through PAYE, so the off-payroll determination question largely falls away — which is why many inside-IR35 roles are delivered this way. But you've added a party to the chain, and you should care about who it is: there's a long history of non-compliant umbrella schemes, and the consequences of picking a bad one can reach back to the client. If you go this route, use a reputable, audited provider and understand exactly what's deducted from the contractor's rate, because they'll notice.
Get advice — genuinely. If a role sits close to the line, an hour with an employment-status specialist costs a fraction of a wrong determination applied across several engagements and several years. Work through it on the facts of how the work will really happen, not how the contract is worded; write down your reasoning and keep it, since “reasonable care” means being able to show your working. Use CEST if it helps you structure the thinking, but keep the evidence behind your answers. And re-check when the role changes: a contract that starts as a defined project and quietly becomes ongoing BAU may not have the same status a year in.
Hire with the status sorted from the start.
Filter by IR35 position, see it on every profile, and get it documented on every contract — instead of discovering the problem at offer stage.