IR35 & Off-Payroll Working

Clear, practical advice on IR35 and the Off-Payroll Working Rules for businesses.
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IR35 & Off-Payroll Working

The IR35 and Off-Payroll Working Rules place significant obligations on businesses engaging contractors through intermediaries, such as personal service companies. Determining employment status correctly is essential, as getting it wrong can result in tax liability, penalties and wider commercial risk.

We support businesses in making and documenting status determinations, reviewing contractor arrangements and implementing compliant processes. Our advice is practical and aligned with how your business operates, helping you manage risk while maintaining flexibility in your workforce.

Determining whether an engagement falls inside or outside IR35 requires careful consideration of both the written terms and the reality of the relationship.

We advise businesses on employment status for tax purposes, including the key factors that affect whether a contractor is likely to be treated as employed or genuinely self-employed. Our assessments are designed to help you make informed decisions and understand where the main areas of risk lie.

This can be particularly valuable where contractor arrangements have developed over time or where working practices do not neatly match the underlying paperwork.

 

For businesses caught by the Off-Payroll Working rules, issuing a compliant Status Determination Statement (SDS) is an essential part of the process.

We advise on preparing SDSs that clearly set out the status conclusion and the reasons behind it. We also help businesses build internal processes that support consistent decision-making and demonstrate reasonable care.

A clear and defensible process can significantly reduce the risk of challenge and help your business manage contractor engagements with greater confidence.

IR35 risk often arises where contractor documentation and day-to-day reality do not match.

We review consultancy agreements and contractor arrangements to identify inconsistencies, practical risk areas and terms that may undermine your intended status position. We also advise on improvements to documentation and working practices to better support the structure you are seeking to put in place.

Our focus is on helping you ensure arrangements are not only well-drafted, but workable in practice.

Where contractors are engaged through agencies or other intermediaries, it is important to understand how responsibility sits across the supply chain.

We help businesses audit contractor arrangements and review how engagements are structured across different entities. This includes identifying where obligations may sit, whether SDS requirements are being met and where there may be gaps in process or documentation.

This type of review can be particularly useful for businesses engaging multiple contractors or using layered recruitment models.

IR35 compliance often depends on the decisions made by HR, procurement and hiring managers at the point of engagement.

We provide practical training and tailored support to help internal teams understand the off-payroll rules, identify risk factors and follow the right processes when engaging contractors.

This helps businesses apply a more consistent approach and reduce the risk of issues arising from informal or inconsistent decision-making.

Key contact

Tom-Hyatt-PNG
Tom Hyatt
Senior Solicitor, Employment

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Meet our experts

Dedicated professionals ready to assist you.

Tom-Hyatt-PNG
Tom Hyatt
Senior Solicitor, Employment
Sam Gray PNG
Samuel Gray
Senior Solicitor, Employment
Alex-Harper-PNG
Alex Harper
Senior Solicitor, Employment
Matt Jenkin PNG
Matt Jenkin
Partner, Employment
Darren-Smith
Darren Smith
Partner, Employment
Alistair McArthur PNG
Alistair McArthur
Partner, Head of Employment

Frequently Asked Questions

Find answers to your most pressing questions about our services and processes.

IR35 is a tax regime designed to prevent individuals from avoiding employment taxes by providing services through an intermediary, commonly a personal service company, where the underlying relationship is more akin to employment.

The off-payroll working rules require medium and large businesses to assess the status of contractors and determine whether IR35 applies. If it does, the business may be responsible for deducting tax and National Insurance.

In most cases, the end user (the business receiving the services) is responsible for making the status determination and issuing a Status Determination Statement.

Risks include liability for unpaid tax and National Insurance, penalties from HMRC and potential disputes with contractors.

Still have questions?

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