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Do I pass the IR35 test?

To summarise, there several factors the tax authorities will observe to establish if you pass the HMRC IR35 test.


Substitution – Could you send an alternative to do your work in your absence?

Control – Do you choose where, when and how the work is done?

Mutuality of Obligation – Is your client obliged to give you work in the future?

Financial Risk – Such as time periods without income due to contracts ending early or financial losses?

Equipment – Do you provide your own?

Part and Parcel – Are you listed on organisation charts, do you have dedicated office space, business cards or anything that shows you as your client’s employee?

You can deal with all of the above when you draw up your contract with your client, simply specify certain things, for example – Control over how you work, your right to send an equally qualified alternative, and also state the absence of any mutual obligation at the end of the contract, by doing this you can have a compliant IR35 contract.

Always remember, what the HMRC is trying to establish is whether or not you are in reality an employee, it is less likely you will fall foul of IR35 rules if your day-to- day working practices do not make you look like an employee.

At Prosperity Pay, we are here to help and can provide you with all the advice you need to ensure your pass the IR35 test.