IR35 Calculator 2026/27

IR35 is the UK tax rule (formally the "off-payroll working rules") that prevents contractors from using a personal service company (PSC) purely to convert what would otherwise be employment income into more lightly taxed dividend income.

If your working arrangement looks like employment (right of substitution restricted, mutual obligation, client controls how you work), HMRC treats you as "inside IR35" — the contract value is taxed like a salary even though it's paid to your company.

If you're genuinely in business on your own account (multiple clients, project-based, real substitution rights, your own equipment), you're "outside IR35" and can use the £12,570 salary + dividend strategy.

Since 6 April 2021, for public-sector engagements and medium/large private-sector clients, the client (or fee-payer if there's an agency) makes the IR35 determination and is responsible for operating PAYE if inside.

For small private-sector clients (under £10.2m turnover, fewer than 50 employees, balance sheet under £5.1m), the contractor's own PSC remains responsible for determining status and operating the deemed payment rules if inside.

HMRC's CEST tool ("Check Employment Status for Tax") is the official decision aid, though it's notoriously cautious. Always get a written IR35 contract review for any meaningful engagement.