The key tests
There's no single test. HMRC and the courts look at control over how the work is done, whether you can send a substitute, whether the client must offer and you must accept work (mutuality of obligation), and whether you're in business on your own account.
Who decides
Public-sector clients and medium or large private-sector clients make the decision and must give reasons in a Status Determination Statement. Small private clients leave it to the contractor's company.
Effect on pay
Inside IR35, the fee is paid through payroll with Income Tax, employee NI and, usually, employer NI and Apprenticeship Levy passed on through the rate. Take-home can fall by a fifth or more compared with outside IR35.
Financial comparisons do not decide status
A calculation can explain the consequences of different treatments. It cannot establish which treatment applies from the day rate or from the outcome you would prefer.
Try it with your own numbers
See the take-home difference between an inside IR35 and outside IR35 contract for your day rate in 2026/27.
Frequently asked questions
Can I challenge an IR35 determination?
Yes. The client must have a disagreement process and respond within 45 days.
Check it on GOV.UK: Understanding off-payroll working (IR35) (opens GOV.UK in a new tab)
Sources
Tax year 2026/27. Check these official sources for current rules and deadlines.
Related calculators
- IR35 Calculator — See the take-home difference between an inside IR35 and outside IR35 contract for your day rate in 2026/27.
Related guides
- Dividend Tax Explained — How dividends are taxed in 2026/27 after the rates rose to 10.
- Tax for the Self-Employed — How sole traders are taxed in the UK: Income Tax on profit, Class 4 NI, allowable expenses and payments on account.