IR35 Off-Payroll Working Rules: Who Qualifies and What You Get
Understand how these rules determine your employment status for tax purposes and avoid unexpected backdated tax bills.
These rules are used to determine whether a contractor should be taxed as an employee or as a self-employed individual.
Who it's for
This applies to contractors and the clients who hire them.
What you get
You get a formal determination of your employment status for tax purposes. This tells you whether you should be taxed as an employee or whether you can continue to operate as a separate business entity.
What it costs you
There is no direct monetary fee to use this system, but you must spend time using the CEST tool. This is a digital tool provided by the government to help you assess your specific employment status.
The catch to know
The biggest risk is an incorrect assessment. If you determine your status as "outside IR35" (self-employed) when you should actually be "inside IR35" (an employee), you may face backdated tax bills.
How to apply
- Review your working relationship with your client.
- Use the official CEST tool to help assess your status.
- Follow the guidance provided by the government to ensure compliance.
- Visit the official portal for more details: https://www.gov.uk/guidance/understanding-off-payroll-working-ir35