IR35 Explained: What Contractors Need to Know
A plain-English guide to IR35, off-payroll working rules, and how they affect your take-home pay.
What IR35 is and why it exists
IR35 is designed to identify disguised employment where a contractor works like an employee through a limited company.
Status determines whether income is taxed like employment or through normal company contractor treatment.
Inside versus outside IR35
Inside IR35 generally means PAYE and NI treatment with lower net flexibility. Outside IR35 keeps normal contractor tax treatment where genuinely independent.
Contracts, working practices, substitution rights, control, and mutuality of obligation all influence status.
How to reduce risk
Review contracts before signing, align real working practices with contract terms, and keep evidence of independence.
If status is unclear, seek specialist advice early. A proactive review is cheaper than retrospective disputes.
Put This Into Action
Use FIQ Personal to model inside vs outside IR35 net income outcomes and plan tax reserves based on current contracts.
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