Glossary · UK
What is Off-Payroll Working Rules?
The rules that make a client responsible for deciding the employment status of a contractor working through their own company.
Full Definition
The off-payroll working rules are the part of the IR35 regime that shifts responsibility for assessing a contractor's status onto the organisation that engages them. Where a worker provides services through their own intermediary, usually a personal service company, the client must decide whether, if the intermediary were ignored, the relationship would look like employment. Since April 2021 this responsibility has applied to medium and large private sector clients as well as to all public sector bodies; small clients remain outside the rules, so the contractor's own company keeps the IR35 decision. If an engagement is judged to be inside the rules, the fee payer must deduct Income Tax and employee National Insurance through PAYE and account for employer National Insurance at 15% for 2026/27. The client must issue a Status Determination Statement explaining the decision and give the worker a route to dispute it. The aim is to ensure that people working like employees pay broadly the same tax as employees, regardless of the structure they work through.