Inside vs Outside IR35: five checks before you accept a contract

IR35 applies to each engagement separately. In most public sector and medium or large private sector engagements, the client decides the worker's employment status for tax. If the end client is a small private sector business, responsibility can remain with the worker's intermediary.

Ask the recruiter who the end client is, whether the client is responsible for the determination and when you will receive the reasons for that decision.

An advert marked Outside IR35 is helpful, but the label alone does not explain why. Where the client is responsible, a Status Determination Statement should state the decision and the reasons for it.

Employment status is not decided by a single clause. A strong substitution clause is not useful if the client would never permit substitution in practice. A project description is not enough if the contractor is managed like an employee every day.

Before starting, ask who will set priorities, approve leave, provide equipment, decide working hours and accept completed deliverables.

Compare more than the headline day rate. Include expected billable days, umbrella margin where relevant, pension choices, professional insurance, accounting costs, unpaid time and the risk of early termination.

Use estimates as a comparison aid. Personal tax outcomes depend on individual circumstances and can change when legislation or assumptions change.

Save the advert, contract, determination, project scope and any clarification about working practices. If the engagement changes, revisit the status rather than assuming the original decision still fits.