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How this checker works
The checker asks 12 multiple-choice questions, each covering a factor that commonly decides employment status cases, such as substitution, control and financial risk. Every answer carries a score: positive numbers point towards self-employment (outside IR35) and negative numbers towards deemed employment (inside IR35).
The scores are added together. A total of +6 or more is shown as likely outside IR35, −4 or less as likely inside, and anything in between as borderline. Answers worth +2 or more are listed as outside indicators, and answers worth −2 or less as inside indicators.
Worked example
A developer answers: substitution only with client approval (0); no obligation to offer or accept further work (+2); chooses their own methods (+2); core meeting times but otherwise flexible (0); on the client's premises every day (−2); own laptop plus some client systems (0); a day rate regardless of output (−1); internal email and on the team chat (−2); this client takes all their time (−1); a renewed 6 to 12 month contract (0); no employee benefits (+2); an outside-IR35 contract but no status determination statement (0). The total is 0, so the verdict is borderline. The outside indicators listed are mutuality of obligation, control over how the work is done and employee benefits; the inside indicators are where the work is done and being part and parcel of the organisation.
The rules behind the result
- Public sector clients have decided whether the off-payroll working rules apply since 6 April 2017, and medium or large private and voluntary sector clients since 6 April 2021. Since April 2021 the client should give its decision, with reasons, in a status determination statement (SDS).
- For a small client outside the public sector, the worker's intermediary, such as their own limited company, decides.
- For financial years beginning on or after 6 April 2025, a company is medium or large if it meets two or more of: turnover over £15 million, balance sheet total over £7.5 million, more than 50 employees.
- A worker who disagrees with an SDS can tell the client, which must respond within 45 days.
- HMRC's Check Employment Status for Tax (CEST) tool is anonymous, and HMRC says it will stand by the result as long as the information given is accurate and in line with its guidance. This checker carries no such assurance.
Limits of the result
The weights are an editorial model, not a legal test. Real decisions turn on the written contract and on how the work happens in practice, and tribunals weigh the same facts differently from one case to the next. The result shows which facts matter most before asking the client for an SDS, running CEST or taking specialist advice.
Frequently asked questions
The questions readers most commonly ask about this topic. Each answer is reviewed by the Editor against current HMRC, FCA and MoneyHelper guidance.
▸ What is IR35 in plain English?
IR35 is HMRC's rule for spotting "disguised employment" — where a contractor working through their own limited company is doing a job that, in substance, looks like employment. If IR35 applies, the contractor must pay broadly the same tax and NI as an employee. The aim is to stop the tax arbitrage between salary (taxed heavily) and dividends (lower rates plus no NI).
▸ Who decides whether a contract is inside or outside IR35?
For medium or large private-sector clients, the END CLIENT has decided since April 2021. Broadly, a client company is medium or large if it meets two or more of: turnover over £10.2m, balance sheet total over £5.1m, more than 50 employees. Higher limits of £15m turnover and £7.5m balance sheet apply for financial years beginning on or after 6 April 2025; HMRC says 2027/28 is the earliest tax year they affect. For smaller private-sector clients, the contractor's own company decides. For public-sector contracts, the end client always decides. The decision is recorded in a "Status Determination Statement" (SDS) that the contractor receives.
▸ What does HMRC look at to decide IR35 status?
Three key tests: (1) Mutuality of obligation — must the client offer work and you accept it? (2) Personal service — must YOU specifically do the work, or could you send a substitute? (3) Control — does the client direct how, when, and where you work? Plus secondary factors: financial risk, equipment provided, integration with the client's team, exclusivity. HMRC's CEST tool gives indicative answers but isn't binding.
▸ What's the financial difference between inside and outside IR35?
There is no single percentage: it depends on the day rate, expenses and how the contractor's company pays out its profits. Inside IR35, the fee-payer deducts Income Tax and employee National Insurance from the fee, and pays employer National Insurance and, where it applies, the Apprenticeship Levy. Outside IR35, the fee is paid to the contractor's company without those deductions; the company pays Corporation Tax on its profits, and the director is often paid through a mix of salary and dividends. The umbrella vs PAYE vs limited company checker compares the routes for a given day rate.
▸ Can a contract be partly inside and partly outside IR35?
Each contract is assessed independently. You can have multiple contracts where some are inside and some are outside, processed differently for each. But within a single contract, HMRC views the entire arrangement as either inside or outside — there's no "partial" status. If a project changes nature significantly, a fresh status determination may be appropriate.
▸ What happens if HMRC challenges my outside-IR35 status?
HMRC opens an enquiry (typically within 12 months of the relevant Self Assessment return). They review contracts, working practices, communications. If they conclude IR35 applied, they recalculate tax and NI as if you'd been employed, plus interest and penalties. Successful defences typically need documented evidence of substitution rights, lack of MoU, business-on-own-account behaviour. Many contractors carry IR35 insurance for legal defence costs.
How UK Tax Drag holds itself to account
Every page is reviewed against the editorial standards, written from primary sources and sourced openly, with corrections listed in the changelog. No affiliate revenue. No sponsored content. No paid placements.
UK Tax Drag is an independent publication by Finsolve Consulting Limited, not affiliated with or endorsed by HMRC, GOV.UK or any government body.