The IR35 Checker is an interactive questionnaire designed to help contractors and businesses assess their IR35 status. This tool is essential for individuals and companies in the UK who need to determine their tax obligations under the IR35 legislation.
How IR35 Checker works in 2026
The IR35 Checker uses a series of questions to evaluate whether a contractor should be classified as self-employed or an employee for tax purposes. This determination affects the way tax and National Insurance contributions are paid. According to HMRC, if a contractor falls inside IR35, they are considered an employee for tax purposes and must pay Income Tax and National Insurance Contributions (NICs) as if they were an employee.
In 2026, HMRC's criteria for determining IR35 status focus on the nature of the working relationship. Key factors include control, substitution, and mutuality of obligation. For instance, if a contractor has the freedom to substitute someone else to do the work, they might fall outside IR35. The IR35 Checker evaluates these factors based on the latest guidelines and regulations, ensuring users get an accurate assessment.
According to HMRC, the current tax rates for contractors falling inside IR35 include a basic tax rate of 20% for income up to £50,270, and a higher rate of 40% for income between £50,271 and £150,000. NICs are also applicable, with rates of 12% and 2% for different income bands. Using real-time data, the IR35 Checker calculates potential liabilities to aid in financial planning.
When to use IR35 Checker
Consider using the IR35 Checker in the following situations:
- Scenario 1: A contractor starting a new contract with a large UK company.
- Scenario 2: A freelancer unsure about their employment status after changes in contract terms.
- Scenario 3: A company hiring contractors and needing to ensure compliance with IR35 regulations.
- Scenario 4: An accountant advising clients on IR35 obligations.
Key UK rates / thresholds for 2026
Understanding these rates is essential for accurate IR35 assessment.
| What | Rate / threshold | Notes |
|---|---|---|
| Basic Income Tax Rate | 20% | Up to £50,270 |
| Higher Income Tax Rate | 40% | £50,271 to £150,000 |
| National Insurance Contributions | 12% / 2% | Different bands apply |
| IR35 Compliance Fee | £50 | Estimated cost for assessment services |
Worked example
Consider Jane, a freelance IT consultant earning £60,000 annually. She is reviewing her status with the IR35 Checker. Her contract specifies she must personally deliver services, indicating control by the client. Her total taxable income is subject to a 20% basic rate tax on the first £50,270, and 40% on the remaining £9,730. Therefore, her tax amounts to £10,054. NICs are calculated at 12% for the first £50,270 (£6,032.40) and 2% for the remaining £9,730 (£194.60), totalling £6,227.
Common mistakes
- Assuming all contractors are outside IR35. Verify each contract separately.
- Ignoring changes in contract terms. Reassess IR35 status regularly.
- Overlooking mutuality of obligation. Understand obligations in the contract.
- Failing to document working practices. Keep detailed records as evidence.
Related calculations
Users often need to consider the Employer National Insurance Contributions when assessing IR35 status. Additionally, calculating the deemed payment is necessary for those inside IR35 to ensure accurate tax reporting. Understanding dividend tax implications is also important for company directors.
What HMRC checks
HMRC requires contractors to keep records of all contracts, invoices, and correspondence related to their engagements for at least six years. They may scrutinise contracts for control, substitution, and mutuality of obligation aspects. Inconsistencies or lack of documentation can trigger questions or investigations.
Bottom line
The IR35 Checker is a vital tool for contractors and businesses to assess their tax status in line with HMRC guidelines. Regular use can prevent costly mistakes and ensure compliance. For personalised advice, consulting with a tax professional is recommended.