Glossary · Compliance
What is IR35
Also called: off-payroll working rules.
Definition
UK off-payroll working rules that decide whether a contractor working through their own company should be taxed as an employee.
Applies to: UK · Reviewed by James Doyle
In practice
For medium and large private-sector clients, the client makes the status determination and the fee-payer — usually the agency — deducts tax if the engagement is inside IR35.
Agencies sit in the middle of the liability chain, so status determination statements, contract wording and working-practice evidence need to be filed, not assumed.
Related terms
Worker classification
Whether a worker is an employee or an independent contractor in law. Getting it wrong creates back taxes, penalties and client indemnity claims.
ReadUmbrella company
A UK payroll intermediary that employs contractors and processes PAYE on their behalf, used widely for inside-IR35 assignments.
ReadPAYE
Pay As You Earn: the UK system for deducting income tax and National Insurance at source. The default for agency temps employed directly.
Read
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