Off-payroll working (IR35)

First find who owns the status decision

Off-payroll working applies when someone supplies services through their own intermediary and would be employed for tax purposes if engaged directly. The rules operate across the UK and are considered for each contract, not once for the person. HMRC's overview of off-payroll working explains the worker, client and supply-chain roles.

Public-sector clients and medium or large private and voluntary-sector clients normally determine the worker's tax status. For a small private or voluntary-sector client, responsibility normally remains with the worker's intermediary. Check the current client guidance before relying on company size. The accounting tests and group rules matter, and HMRC's transition guidance explains when revised size thresholds first affect off-payroll decisions.

Test the engagement, not the contractor label

Look at the contract and the work as it is actually done. Control, personal service, substitution, financial risk and the wider relationship can all matter. If the client owns the decision, it must take reasonable care and give the worker and relevant contracting party a Status Determination Statement with its conclusion and reasons.

Leave a decision trail payroll can follow

Before the engagement starts, map the intermediary and any agencies, confirm who owns the determination and keep the evidence behind that conclusion. Recheck it when the contract or working practices change.

Where the worker is deemed employed for tax, identify the deemed employer and pass the decision through the supply chain so the correct party can operate PAYE on the relevant fees. Keep the determination, reasons, communications and payment records together. If you are a small client, retain the evidence for that size conclusion and respond if the worker or contracting party asks you to confirm it.