IR35 compliance —
know your status
before HMRC does.

IR35 is UK tax legislation targeting 'disguised employment' — where a contractor works through a personal service company (PSC) but in practice operates like an employee. If HMRC determines you are inside IR35, your income is taxed as employment income, which removes the tax efficiency of operating through a limited company.

If caught by IR35, the fee paid to your company is treated as your salary. You pay income tax and employee National Insurance on it — and the engager pays employer NI on top. The ability to draw dividends at a lower tax rate disappears for income from that contract.

For medium and large businesses (more than 50 employees or over £10.2m turnover), the end-client determines IR35 status and must issue a Status Determination Statement. For small companies, you still assess your own status. An incorrect determination can result in significant back-tax liabilities for either party.

HMRC looks at three main factors: substitution (can you send someone else to do the work?), control (who determines how, when, and where the work is done?), and mutuality of obligation (is there an obligation to offer and accept further work?). No single factor is decisive — HMRC looks at the whole picture, including your level of integration into the client's organisation and whether you carry genuine financial risk.

Yes. If your end-client determines you are inside IR35, you have the right to challenge it through a formal Client-Led Disagreement Process. A well-documented position — a reviewed contract, working practices evidence, and a clear substitution clause — significantly strengthens your case.

Umbrella companies simplify compliance if you are inside IR35, but they carry their own considerations around cost and tax treatment. The right structure depends on your contract, your income level, and your longer-term plans. We assess umbrella vs PSC vs PAYE based on your specific situation rather than giving generic advice.

A defence file is the set of documents that demonstrates your outside IR35 position — typically a reviewed contract, working practices evidence, a substitution record where possible, and a written analysis. If HMRC investigates, it is your primary evidence base. We help contractors build and maintain one as a matter of course.