Your company is taxed as a business
Fees are paid gross. The company pays Corporation Tax on its profit and you choose how to take money out, usually a mix of salary, dividends and pension contributions.
Contractor accountants · IR35
IR35 accountants: who decides your status and what we do about it
Whether a contract is inside or outside IR35 depends on who your client is, what the contract says and how the work actually runs. Here is who makes the decision, what changes either way and where an accountant helps.
Who decides
The size and sector of your client decide who makes the call
Public sector client
The client decides whether the rules apply and gives you a status determination statement with its reasons.
Medium or large private client
The client decides, in the same way. This has applied to the private and voluntary sectors since 6 April 2021.
Small private client
Your own company decides whether the rules apply and, if they do, accounts for the tax itself.
Is your client small?
A client is medium or large if it meets two of three tests
The tests must be met for two financial years in a row. HMRC looks at the last financial year whose accounts filing deadline passed before the tax year began. A company is small in its first financial year.
- Turnover over £10.2 million (£15 million for financial years beginning on or after 6 April 2025)
- Balance sheet total over £5.1 million (£7.5 million for those years)
- An average of more than 50 employees
Inside or outsideOutside IR35 Inside IR35, medium or large client Inside IR35, small client
What changes for your company
Tax comes off before your company is paid
The fee payer deducts Income Tax and employee National Insurance and pays employer National Insurance itself. Your company can pass the net amount to you without further Income Tax or National Insurance.
Your company works out a deemed payment
The company calculates a deemed employment payment from its income from the contract after a flat 5% deduction for running costs. It reports the payment to HMRC on or before 5 April. The payment and the employer National Insurance on it are deducted from the company's taxable profit.
What we do
IR35 work, as part of running your company
The review is worth most before you sign, while there is still room to change the terms. After that we keep the company's tax position in line with the answer.
- A written review of the contract terms and the way the work will run, before you sign
- A check of the client's status determination statement and help to dispute it
- The deemed employment payment worked out and reported, where a small client contract is inside
- Company accounts, Corporation Tax and payroll kept consistent with the IR35 position
- Your own Self Assessment, so company and personal tax agree
Questions
IR35 accountant questions
What does an IR35 accountant do?
We read the written contract and ask how the work will actually run, then give you a written view on whether the rules apply. Where your client is small, that view supports the decision your own company has to make. Where the client is medium, large or in the public sector, we check the client's status determination statement and help you dispute it if you disagree. Either way we keep the company accounts, payroll and your tax returns consistent with the outcome.
Can my accountant decide my IR35 status?
Only with a small client outside the public sector, where your own company makes the decision and we advise it. For a public authority or a medium or large client, the client decides and must give you a status determination statement with its reasons. If you disagree you can make representations and the client must respond within 45 days.
Do the higher company size thresholds change who decides?
Eventually. For financial years beginning on or after 6 April 2025 a client is medium or large only if it meets two of three tests for two consecutive years: turnover over £15 million, a balance sheet total over £7.5 million and more than 50 employees. Size is judged on the last financial year whose filing deadline passed before the tax year began. For a normal 12-month financial year, HMRC says the change cannot affect a client before the 2027/28 tax year.
What happens to my company's income if a contract is inside IR35?
With a medium or large client, the fee payer deducts Income Tax and employee National Insurance from your company's fees and pays employer National Insurance itself. Your company can then pass the net amount to you without further Income Tax or National Insurance. With a small client, your company works out a deemed employment payment after a flat 5% deduction for running costs and reports it to HMRC on or before 5 April.
Your exact fee, by email
Answer a few questions about your company and we email your fee for each level.