Who decides my IR35 status?

For engagements with medium and large clients (private sector since April 2021, public sector since 2017), the end client decides whether IR35 applies and must issue a Status Determination Statement. If the client is a small company, the contractor's own personal service company remains responsible for determining status.

What does "inside IR35" mean?

"Inside IR35" means the working arrangement looks like employment, so Income Tax and National Insurance must be deducted as if the contractor were an employee. "Outside IR35" means the contractor is genuinely in business on their own account and can be paid gross through their company. Status is judged on factors like control, substitution and mutuality of obligation.

Tax & Business Structure

What is IR35?

IR35 is HMRC's "off-payroll working" legislation, designed to ensure contractors who work like employees pay broadly the same tax as employees. If an engagement is caught by IR35, the contractor's personal service company must pay Income Tax and National Insurance on the income as though the contractor were directly employed. Since April 2021, medium and large private-sector clients are responsible for determining IR35 status and, where necessary, deducting tax at source. Public-sector clients have had the same obligation since 2017.

IR35: frequently asked questions

Who decides my IR35 status?: For engagements with medium and large clients (private sector since April 2021, public sector since 2017), the end client decides whether IR35 applies and must issue a Status Determination Statement. If the client is a small company, the contractor's own personal service company remains responsible for determining status.
What does "inside IR35" mean?: "Inside IR35" means the working arrangement looks like employment, so Income Tax and National Insurance must be deducted as if the contractor were an employee. "Outside IR35" means the contractor is genuinely in business on their own account and can be paid gross through their company. Status is judged on factors like control, substitution and mutuality of obligation.

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Cite this definition

Yolist. (2026). What Is IR35? Yolist UK Business & Trade Glossary. Retrieved June 9, 2026, from https://yolist.uk/glossary/ir35

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