IR35 Status Checker for UK Consultants (2026 Off-Payroll Rules)

I run Mursa from Bangalore, but roughly a third of my consulting-network friends are UK contractors — IT contractors at banks in Canary Wharf, interim FDs, management consultants at Big Four spin-outs, and Ltd company directors trying to work out whether their next engagement is inside or outside IR35. Every one of them has the same complaint: the HMRC CEST tool is unreliable, agencies push blanket 'inside IR35' determinations to cover themselves, and there is no honest scoring framework online that maps to the case law.

So this post is that framework. I built it after spending two weekends reading through recent First-tier Tribunal decisions (Adrian Chiles, Kaye Adams, Atholl House, PGMOL vs HMRC at the Supreme Court) and cross-referencing what the judges actually turned on versus what the CEST tool asks. The gap is embarrassing. CEST barely tests Mutuality of Obligation — the single factor the Supreme Court used to overturn HMRC in the PGMOL case in September 2024.

This is not tax advice, and if your engagement is borderline you should talk to a specialist like Qdos, Kingsbridge, or your accountant. But if you want a working IR35 checker that gives you a defensible score, a contract clause audit, and an evidence log you can actually show HMRC — this is the one I would use myself.

The template below is a Google Sheet. Copy it, fill it in per engagement, save the PDF export to your engagement folder alongside your signed contract. That is your IR35 defence pack.

Why the HMRC CEST Tool Is Not Enough

HMRC's Check Employment Status for Tax (CEST) tool is the official IR35 checker. It is free, it is on GOV.UK, and HMRC has said it will stand by the result if you answer honestly. All true. It is also, in the words of multiple tax barristers, structurally biased and missing the most important test. Freedom of Information data released by HMRC in 2022 showed CEST returned an 'unable to determine' outcome in roughly 15% of assessments, and independent analyses put the figure higher for genuinely borderline cases.

The bigger problem is that CEST does not properly test Mutuality of Obligation (MoO). HMRC's position is that MoO is present in every contract — the client has to pay, the contractor has to do the work — so it does not need testing. Every senior tax tribunal in the last five years has disagreed. In the Kaye Adams case (2023), the Upper Tribunal explicitly said MoO must be assessed on a per-engagement basis, not assumed. That is a huge blind spot in the official tool.

You can still run CEST — HMRC will treat the result as binding in an enquiry — but do not stop there. Run your engagement through the three-test scoring sheet in the template as well, and keep both outputs in your evidence pack. If they agree, you are on solid ground. If they disagree, your Sheet plus a written rationale is the paper trail you want.

The Three Tests That Actually Decide IR35

Every IR35 tribunal comes down to three tests: Mutuality of Obligation, Right of Substitution, and Control. If you fail any of them badly, you are inside IR35. If you pass all three convincingly, you are outside. The sub-factors are where the arguments happen, and the template scores 15 of them — five per test — with a 0-2 point scale.

Mutuality of Obligation asks: is the client obliged to offer you more work, and are you obliged to accept it? A true consultant works on a specific deliverable, is paid on completion (or a fixed schedule tied to the deliverable), and walks away when it is done. An employee-in-disguise gets rolled from project to project, is expected to be available, and would feel awkward refusing new work. Score yourself honestly on the five sub-factors: fixed deliverable, defined end date, right to refuse extra work, no notice period beyond the SOW, no expectation of renewal.

Right of Substitution asks: could you send a suitably qualified replacement to do the work, and would the client accept them? This is the strongest single indicator of outside-IR35 status. In the Primary Path case, an unfettered right of substitution alone was enough to win outside status. But the right has to be real — a clause in the contract is not sufficient if in practice the client would refuse a substitute. The five sub-factors: contract contains substitution clause, no requirement for client approval, substitute paid by your Ltd (not client), you have actually considered substitutes, no personal-service language in the SOW.

Control asks: does the client tell you what to do, how to do it, when to do it, and where to do it? An employee is controlled on all four. A consultant is controlled on the what (the deliverable) but not the how, when, or where. Five sub-factors here: you set your own hours, you choose your own methods, you can work from your own location, you are not on the client's org chart, you do not attend internal-only staff events.

The template auto-scores each test on a 0-10 scale and gives you an overall verdict: Outside IR35 (25-30), Borderline (15-24), or Inside IR35 (0-14). Borderline is where you either restructure the engagement or get an insured status determination from someone like Qdos or Kingsbridge. Do not just hope for the best on a borderline engagement — that is exactly where HMRC opens enquiries.

The 2026 Off-Payroll Rules and the Small Company Exemption

Since April 2021 (private sector) and April 2017 (public sector), the responsibility for determining IR35 status has shifted to the end client — but only for medium and large clients. If your client is a small company under the Companies Act 2006 definition, the old rules apply and you (the contractor, via your Ltd) remain responsible for the determination and any tax liability.

The small-company thresholds updated in April 2025 and remain in force for the 2026-27 tax year: annual turnover not more than £15 million, balance sheet total not more than £7.5 million, and no more than 50 employees. A client has to breach two of the three thresholds for two consecutive years to lose the small-company exemption. The template has a client-size lookup so you can classify your client in under a minute using their filed accounts at Companies House.

This matters because if your client is small, you make the determination and you carry the tax risk. If your client is medium or large, they make the determination (the Status Determination Statement, or SDS) and — if wrong — the fee-payer (usually the agency) carries the PAYE and NIC liability. Either way, you want a documented rationale. If the client's SDS says 'inside IR35' but your framework says 'outside', you can and should challenge it via the client-led status disagreement process within 45 days.

Contract Clauses That Signal Outside-IR35 Status

The written contract is only one factor — HMRC and tribunals care more about the actual working practices — but a badly drafted contract will sink you regardless of how you work. The template's Contract Clause Checker walks through 12 clauses that need to be present (or absent) to support outside-IR35 status. Read your own contract with this list open.

The clauses to look for: (1) an unfettered right of substitution with no client approval; (2) no mutuality of obligation clause — the contract does not commit the client to offer further work; (3) a clear statement of specific deliverables and completion criteria; (4) no notice period for either side beyond the current SOW; (5) contractor sets own hours and location; (6) contractor provides own equipment where practical; (7) contractor is responsible for correcting defects at their own cost; (8) no exclusivity clause preventing other clients; (9) no requirement to attend internal training or appraisals; (10) fee is tied to deliverable, not time; (11) contractor is not on the client's org chart or intranet as staff; (12) contract explicitly disclaims employment status.

The Clauses to Avoid list is shorter but louder: any requirement for personal service, any language about 'the contractor's role' or 'position', any reference to holiday, sickness, or benefits, any right for the client to move you to different work, any notice period longer than the current SOW, and any wording that implies you report to a named manager rather than a project lead.

If your contract has three or more red flags, ask your agency or client for redrafts before you sign. Most agencies have an outside-IR35 template ready — they just default to the safer inside-IR35 template unless pushed. A single conversation before signing is much cheaper than an HMRC enquiry two years in.

The Financial Impact of Inside vs Outside IR35

Whether your engagement is inside or outside IR35 changes your take-home dramatically. The template's Payment Impact Calc tab does the maths in GBP so you can see exactly what you lose (or gain) by moving from one to the other, using 2026-27 rates.

Outside IR35 on a £500/day engagement (roughly £115,000/year at 230 billable days): you invoice through your Ltd, pay Corporation Tax at 25% on profits, and extract via a low salary (£12,570 tax-free personal allowance) plus dividends. Dividend tax is 8.75% (basic), 33.75% (higher), 39.35% (additional) above the £500 dividend allowance. Rough take-home: £74,000-78,000 depending on how you split and whether you use the £60,000 pension allowance. Effective tax rate around 32-35%.

Inside IR35 on the same £500/day engagement, paid through the agency's PAYE or an umbrella: you get taxed as an employee. Income tax at 20/40/45%, employee NIC at 8%/2%, plus the umbrella will typically deduct employer NIC (13.8%) and Apprenticeship Levy (0.5%) from the assignment rate before calculating your gross. Rough take-home: £61,000-64,000. Effective tax rate around 44-47%.

That is roughly a £13,000-16,000/year difference on a mid-range engagement — enough to justify spending a weekend getting the IR35 framework right, and enough to justify paying £100-300 for an insured contract review from Qdos or Bauer & Cottrell if the engagement is borderline. The Payment Impact Calc lets you plug in your own day rate and see the delta for your specific numbers.

Building the Evidence Log HMRC Actually Wants

If HMRC opens an IR35 enquiry, it will typically be 2-4 years after the engagement ended. The client's project manager will have left, the SOW will be buried in an old SharePoint, and your memory of the working practices will be hazy. The single most valuable habit for any UK contractor is keeping a real-time evidence log per engagement — five minutes a week that will save you thousands if an enquiry ever lands.

The template's Evidence Log tab gives you a per-engagement page to fill in: client name, dates, SOW reference, day rate, and then a running log of anything that supports outside-IR35 status. Examples worth logging: 'refused extra work outside SOW on 12 May', 'worked from own office three days this week', 'used own laptop and licences', 'declined invitation to Christmas party as non-employee', 'invoiced separately for defect fix at own cost', 'engaged with two other clients this month'.

Alongside the log, save these files per engagement to a folder in your Google Drive or OneDrive: signed contract, SOW, Status Determination Statement (if medium/large client), your completed IR35 checker sheet as a PDF, CEST result printout, all invoices, and any email chain that documents you declining extra work or negotiating a substitute. That folder is your defence pack. You want one per engagement, backed up, and named consistently.

Case Law References Every UK Contractor Should Know

The template's Case Law tab summarises 10 recent tribunal outcomes and what they turned on. The point is not to make you a barrister — it is to give you concrete precedents you can point to when arguing your status. If your engagement looks like Atholl House, you know the arguments HMRC will make and how they were beaten.

The must-know cases for 2026: PGMOL vs HMRC (Supreme Court, 2024) established MoO and Control as the two gateway tests. Adrian Chiles won at First-tier Tribunal in 2022 on the basis of being 'in business on his own account' despite significant BBC and ITV control. Kaye Adams (Atholl House) went through five tribunals and finally won at Upper Tribunal in 2023 — HMRC's obsession with control alone was rejected. Primary Path (2022) established that an unfettered substitution right can be decisive on its own. Northern Light Solutions vs HMRC (2021) showed that even a long-term client relationship (10 years, Nationwide) can be outside IR35 if the structure is right.

The cases HMRC won are equally instructive. Robert Lee (Little Piece of Paradise, 2021) — Sky presenter, lost on Control and MoO combined. Basic Broadcasting (Adrian Chiles was almost identical but different tribunal, different outcome — same factors weighted differently). The pattern is clear: control, MoO, and substitution have to be genuinely absent in practice, not just papered over in the contract.

Where This IR35 Checker Fits in Your Wider Freelance Setup

The IR35 Decision Kit is one sheet in what should be a small library of Google Sheets you maintain per engagement. Contractors I know pair it with a simple expense tracker for their Ltd (Xero and FreeAgent are the standard accounting tools in the UK, but a Sheet catches the small stuff that would otherwise sit on a debit-card statement), a budget tracker for personal Self Assessment planning, and a lightweight habit tracker for the recurring weekly admin — Friday evidence log, monthly bookkeeping, quarterly VAT return, annual accounts.

For the accounting side, FreeAgent (free if you bank with NatWest, Mettle, or Royal Bank of Scotland) is genuinely the best-in-class UK contractor tool — it handles VAT under Making Tax Digital, dividend vouchers, corporation tax provisioning, and Self Assessment prep. Xero is more powerful for multi-employee businesses, QuickBooks UK is the mid-market default, and Wise is the standard for anyone invoicing in EUR or USD. The Sheet is not a replacement for those — it is the layer above them that handles engagement-level compliance decisions the accounting software does not touch.

For a comprehensive freelance setup, pair this IR35 checker with a monthly expense tracker template and a personal budget tracker template so your Ltd finances, your personal finances, and your engagement compliance are all in the same drive folder. The whole setup takes an evening to build and saves you every quarter thereafter.

Getting Started With the Template Today

Copy the sheet using the button above. Open the Setup tab and enter your current engagement details: client name, start date, day rate, and expected duration. Move to the Client Lookup tab and enter turnover, balance sheet, and employee count from the client's Companies House filing — the sheet tells you whether the client is small (you determine status) or medium/large (they do).

Open the 3-Test Scoring tab and score yourself honestly on each of the 15 sub-factors — 0 for a fail, 1 for partial, 2 for a clear pass. The sheet aggregates to an overall score and gives you an Inside/Borderline/Outside verdict with the exact case-law reasoning. Then open the Contract Clause Checker and tick off which of the 12 outside-IR35 clauses are present in your signed contract.

Finally, open the Evidence Log tab, name your engagement, and set a recurring calendar reminder for every Friday at 4pm to add one line. That single habit is the single highest-leverage thing you can do to protect yourself from an IR35 enquiry. Save the completed sheet as a PDF at the end of each engagement and file it alongside your contract and invoices.

If your verdict comes out Borderline, do not sign. Go back to the agency or client and ask for the specific clauses that would move you into Outside. Most agencies will negotiate if you show them a scored rationale rather than just asking. If you get a firm no, either walk away or price the engagement as inside IR35 with the umbrella premium built into the rate — do not accept an inside-IR35 engagement at an outside-IR35 day rate.

The template is free, editable, and yours to modify. If you build a better version, share it — the UK contractor community is small enough that a good open-source IR35 kit benefits everyone. HMRC will not build the tool we need. We have to build it ourselves.