The short version: Off-payroll means getting paid for work without being on an employer’s payroll. Freelancers, contractors, and people working through their own limited companies are all off-payroll. You invoice for your work rather than receiving a salary.
Why does it matter for tax?
Off-payroll workers typically pay less National Insurance than employees. This makes it attractive, but HMRC introduced IR35 rules to catch “disguised employees” who should really be on the payroll.
What’s IR35?
IR35 rules apply if you work off-payroll but your actual working relationship looks like employment. If you’re controlled by the client, can’t send a substitute, work set hours, and use their equipment, you might be inside IR35. That means paying roughly the same tax as an employee.
Who decides your status?
For medium and large private sector clients and all public sector clients, the client determines whether IR35 applies. For small private sector clients, you assess your own status.
What should you do?
Understand how you work and whether it looks like employment or genuine self employment. Keep records showing your business operates independently. Review contracts carefully.
Working off-payroll and worried about IR35? Let’s review your situation together.
