IR35 Calculator

IR35 Calculator

IR35 Calculator

The IR35 calculator website is provided to support the recruitment agencies, clients and thousands of contractors that we work with each year and remove some of the common misconceptions about IR35. The IR35 Calculator provides 2 purposes, the first is a 'Path of Education' for those who do not understand what IR35 is, how IR35 came about or it's significant impact on UK Contracting. IR35 is not just an issue for contractors, it affects everyone, employers, employees, recruitment agencies, accountants, freelancers, payroll providers and the wider UK economy as a whole. Secondly, the IR35 Calculator provides a payroll calculator for quick calculations and illustrations of take home pay under each potential variant of IR35.

IR35 is the pivotal legislation that determines whether a contractor or freelancer is deemed to be employed or self employed within their contract.
If you are new to IR35 or want to find out how IR35 affects contractors and how contractors can be paid you should read our suite of IR35 Guides which include practical examples and test cases.
Your IR35 status is determined by HMRC who use a series of business entity tests to gauge whether you are contracting inside or outside of IR35 legislation. Your IR35 status then determines how you should be paid whilst working within your contract.

The IR35 Calculator website provides a set of contractor calculators which will allow you to gauge whether you fall inside of outside of IR35. Once you have determined your IR35 status, you can then use one of the IR35 calculators to gauge you take home pay.

IR35: Business Entity Tests

As a freelancer / contractor, the first thing you need to do is determine your IR35 status. Use the Business Entity test below to determine your IR35 status, once you know your status, choose the relevant IR35 calculator from the top of this page to work out your take home pay.. The IR35 status calculation looks at twelve specific business entity tests as defined by HMRC. These include:

  1. Business Premises:
  2. Professional Indemnity Insurance:
  3. Efficiency:
  4. Assistance:
  5. Advertising:
  6. Previous PAYE:
  7. Business Plan:
  8. Repair at own Expense:
  9. Client Risk:
  10. Billing:
  11. Right of Substitution:
  12. Actual Substitution:

IR35: Take the Test

Answer the following questions to receive a IR35 Risk score for your contract. The IR35 Guage above will alter as you answer the questions.

Business Premises

Q. Does your business own or rent business premises which are separate both from your home and from the end client's premises? For the purposes of this test, either you or your intermediary can own or rent a seperate busness premises..

Evidence required by HMRC
Professional Indemnity Insurance

Q. Do you need professional indemnity insurance (PII)?

Evidence required by HMRC
Efficiency

Has your business had the opportunity in the last 24 months to increase your business income by working more efficiently?

Evidence required by HMRC
Assistance

Q. Does your business engage any workers who bring in at least 25% of your yearly turnover?

Evidence required by HMRC
Advertising

Q. Has your business spent over £1,200 on advertising in the last 12 months? (Excludes entertainment costs)

Evidence required by HMRC
Previous PAYE

Q. as the current end client engaged you on PAYE employment terms, within the 12 months which ended on the last 31 March with no major changes to your working arrangements?

Evidence required by HMRC
Business Plan

Q. Does your business have a business plan with a cash flow forecast which you update regularly AND a seperate business account?

Evidence required by HMRC
Repair at Own Expense

Q. Would your business have to bear the cost of having to put right any mistakes?

Evidence required by HMRC
Client Risk

Q. Has your business been unable to recover more than 10% of yearly turnover for work completed in the last 24 months?

Evidence required by HMRC
Billing

Q. Do you negotiate your own payment terms and invoice for completed work before being paid?

Evidence required by HMRC
Right of Substitution

Q. Does your business have the right to send a substitute worker?

Evidence required by HMRC
Actual Substitution

Q. Have you hired any full or part time employees or subcontracted any work that you have won tenders for?

Evidence required by HMRC
  • Details of end client
  • Employee/sub contractor details
  • Role description / employment contract
  • Recruitment responsabilties and details
  • Payment and payroll details
  • Payment audit trail

The IR35 calculator is designed for illustration purposes only. Whilst we aim to deliver high accuracy, we make no guarantees on the accuracy of the financial calculations made.

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