The short answer
Your contract can't make you self-employed for tax on its own. HMRC and the tribunals look at how you actually work. But the contract is the first evidence they read, so it should describe the real arrangement accurately: deliverables, your control over how you work, and any genuine right to send someone else.
Who decides your status
- The off-payroll working rules (often called IR35) apply when you work through your own intermediary, usually a limited company (gov.uk).
- If your client is in the public sector, or is a medium or large private-sector business, the client decides your status and must give you a status determination statement.
- If your client is a small private-sector business, your own company decides.
- If you work as a sole trader without a company, the off-payroll rules don't work the same way, but HMRC can still treat you as an employee for tax if that's how you really work.
- HMRC's check employment status for tax (CEST) tool gives a view on a particular engagement.
What HMRC looks at
- Control: does the client decide how, when and where you work, or just what you deliver?
- Substitution: can you send someone else to do the work, and would the client really accept that?
- Obligations: must the client keep offering work, and must you keep accepting it?
- Financial risk: do you price jobs, fix your own mistakes at your own cost, use your own equipment?
- Being part of the organisation: staff email, line management, team rotas, employee benefits.
What the contract can usefully say
- Describe the work as deliverables or a project, not open-ended hours.
- Give you control over how and when the work is done, if that's true.
- Include a right to send a suitably skilled substitute, if the client will genuinely accept one.
- Price per project or per day, with you bearing the cost of putting your own mistakes right.
- Leave out employee-style terms: holiday pay, sick pay, performance reviews, staff policies.
Labels don't decide it
Our Freelance Services Agreement and Independent Contractor Agreement both state that you're self-employed and responsible for your own tax. That statement helps only if the rest matches. Courts look past labels to the reality: in Autoclenz v Belcher (2011) the Supreme Court ignored written terms that didn't reflect how the work was actually done.
Questions people ask
Does using the Independent Contractor Agreement put me outside IR35?
No contract can do that by itself. It helps if it accurately describes how you work, but your status depends on the reality of the engagement.
Who pays the extra tax if I'm inside IR35?
When a medium or large client or a public body decides you're inside, the fee-payer deducts tax and National Insurance before paying your company. With a small client, your company accounts for it.
Does IR35 apply to sole traders?
The off-payroll rules are about working through an intermediary such as your own limited company. Sole traders still need to be genuinely self-employed for tax.
This guide explains the general position in the UK as we understand it on 22 October 2026. The law differs between England and Wales, Scotland and Northern Ireland, and it changes. If something important turns on it, talk to a solicitor or an accountant.
Templates and tools for this
Send your first agreement free
Send a contract that describes the work the way you really do it, and have your client sign it from a link.
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