IR35 Contract Checker
Assess whether your contract is likely inside or outside IR35. Answer questions across 7 key factors and get an instant assessment with actionable recommendations.
IR35 Contract Check
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How much control does the client have over how, when, and where you work?
How to use: Answer all questions in each category by selecting the option that best describes your working arrangement. Click "Next" to move through 7 categories, then view your IR35 assessment.
1. Does the client dictate how you carry out the work?
Control over methods and processes is a key indicator. If you decide how to deliver the end result, this points toward outside IR35.
2. Does the client control your working hours?
Being required to work set hours like an employee suggests inside IR35. Choosing your own schedule points to outside.
3. Does the client dictate where you work?
Being required to work on client premises like staff suggests employment. Choosing your own location points to self-employment.
What This Tool Checks
Our IR35 checker assesses your engagement against the seven key factors HMRC uses to determine employment status. Each factor is scored individually and combined into an overall assessment.
Control
How much control the client has over how, when, and where you carry out the work.
Substitution
Whether you have a genuine right to send someone else to do the work in your place.
Mutuality of Obligation
Whether the client must offer work and you must accept it beyond the current project.
Financial Risk
Whether you bear genuine financial risk including equipment costs and defective work.
Part and Parcel
How integrated you are into the client organisation compared to permanent staff.
Equipment & Premises
Who provides tools, equipment, and workspace for the engagement.
Exclusivity & Business Entity
Whether you operate as a genuine business with multiple clients and proper infrastructure.
What Is IR35 and Why Does It Matter?
IR35 is the UK's intermediaries legislation that determines whether a contractor is genuinely self-employed or effectively an employee for tax purposes. It was introduced in 2000 to combat "disguised employment," where workers operate through a limited company but work in a manner indistinguishable from employees.
If your contract falls inside IR35, you must pay income tax and National Insurance at employed rates, which typically reduces take-home pay by 20-25%. Since the off-payroll working reforms of April 2021, medium and large private sector clients are responsible for making the IR35 determination for contractors working for them.
The legislation looks beyond the written contract to the reality of the working relationship. HMRC examines factors like control, substitution, mutuality of obligation, financial risk, and organisational integration to determine whether the engagement is genuinely self-employment or disguised employment.
Key IR35 Consequences
- 20-25% reduction in take-home pay if caught inside
- HMRC can investigate up to 6 years of past contracts
- Penalties and interest on top of unpaid tax
- Client liability for incorrect determinations
- Loss of dividend and expense tax advantages
- Potential reputational damage with future clients
How HMRC Determines IR35 Status
No single factor determines IR35 status. HMRC looks at the overall picture of your working arrangement. Understanding these principles helps you strengthen your position.
The Contract Matters
Your written contract sets the framework, but HMRC will look beyond the words to actual working practices. Ensure your contract accurately reflects how you work. Inconsistencies between contract terms and reality weaken your position significantly.
No Single Factor Decides
IR35 status is determined by the overall picture. Being strong in one area (like substitution) cannot fully compensate for being weak in others (like control). Aim to strengthen your position across all factors rather than relying on one strong point.
Evidence Is Everything
Keep contemporaneous evidence of your working practices. Emails showing you chose your own hours, invoices from substitutes, contracts with multiple clients, and equipment receipts all build a picture of genuine self-employment that can be presented if challenged.
Not Legal or Tax Advice
This tool provides general guidance only and does not constitute legal or tax advice. IR35 determinations depend on the specific facts of each engagement. Always consult with a qualified IR35 specialist or employment status expert for definitive guidance. This tool does not replace HMRC's CEST tool.
Frequently Asked Questions
What is IR35?
IR35 is UK tax legislation (officially the Intermediaries Legislation, contained in Chapter 8 of ITEPA 2003) that targets contractors who work through an intermediary such as a limited company but would be classed as an employee if engaged directly. If a contract falls inside IR35, the contractor must pay broadly the same income tax and National Insurance as an employee, significantly reducing take-home pay.
How do I know if I am inside or outside IR35?
IR35 status is determined by the actual working practices of your engagement, not just the words in your contract. HMRC examines several key factors including the degree of control the client has over you, whether you have a genuine right of substitution, the mutuality of obligation, your financial risk, and whether you are integrated into the client organisation. No single factor is decisive; it is the overall picture that determines your status.
What happens if I am caught inside IR35?
If HMRC determines your contract is inside IR35, you will owe income tax and National Insurance on your earnings from that engagement as if you were an employee. This typically reduces take-home pay by 20-25%. HMRC can investigate up to 6 years of past engagements (20 years if fraud is suspected), and penalties plus interest can be applied. Since April 2021, for medium and large private sector clients, the client is responsible for making the IR35 determination.
What is the difference between inside and outside IR35?
Outside IR35 means HMRC considers you to be genuinely self-employed for that engagement. You can pay yourself through dividends, claim business expenses, and typically retain more of your earnings. Inside IR35 means the engagement is effectively employment, and you must pay employed levels of tax and NI. The difference in take-home pay can be £10,000-£20,000 per year on a typical contractor income.
Who is responsible for determining IR35 status?
Since April 2021, medium and large private sector clients (as well as all public sector clients since 2017) are responsible for determining the IR35 status of contractors working for them. Small private sector clients are exempt, and in those cases the contractor retains responsibility. The determination must be made with reasonable care, and the contractor has the right to dispute it through the client's status disagreement process.
What is HMRC's CEST tool?
CEST (Check Employment Status for Tax) is HMRC's free online tool for determining IR35 status. While HMRC states it will stand behind CEST results if the information provided is accurate, the tool has been widely criticised for returning 'unable to determine' results in many cases and for not adequately considering mutuality of obligation. Many IR35 specialists recommend using CEST alongside professional advice rather than relying on it alone.
Can I challenge an inside IR35 determination?
Yes. If a client determines your contract is inside IR35, you can use their status disagreement process to challenge it. You should provide evidence of your actual working practices, particularly around control, substitution, and mutuality of obligation. If the disagreement process fails, you can escalate to HMRC or ultimately to a tax tribunal. Many successful challenges have been won at tribunal by demonstrating genuine self-employment practices.
How can I strengthen my position to be outside IR35?
Key steps include ensuring your contract includes a genuine right of substitution, maintaining control over how and when you work, working for multiple clients, providing your own equipment, bearing financial risk for defective work, having business insurance, operating through a properly structured limited company, and keeping evidence of your working practices. Our tool above identifies specific areas where you can strengthen your position.
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