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Nebula Finance
IR35, explained without the jargon

IR35, in plain English.

No tax-speak. Here is what IR35 is, the five things HMRC checks, why no tool has the final word, and the real court cases behind your result — so you know exactly where you stand.

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The five things HMRC looks at

HMRC does not decide IR35 with one rule. It weighs up five things about how you really work. The bigger the percentage, the more weight that factor tends to carry.

28%

Personal service & substitution

Could you send someone else to do the work, or must it be you?

26%

Control

Who decides what you do, and how, when and where you do it?

18%

Mutuality of obligation

Must the client offer you work — and must you accept it?

14%

Financial risk

Is your own money at risk if something goes wrong?

14%

In business on own account

Do you run like a real business of your own?

These weights come from real UK court decisions and HMRC's own guidance — not guesswork.

Why no tool has the final word

HMRC has its own free tool, called CEST (Check Employment Status for Tax). It can help, but it has real gaps. Here is where it falls short.

It can miss the “must offer, must accept” test

This test asks whether the client must give you work and you must take it. The courts say it matters. CEST plays it down.

Its control test is blunt

How much the client controls your work is central to status. CEST uses a rough version that can miss the detail.

It can ignore the bigger picture

Whether you run like a real business is part of the test. CEST gives this too little weight.

It often cannot decide

On a large share of cases, CEST simply says “unable to determine” — and you are left without an answer.

The honest bit: no status result — ours or HMRC's — is legally binding. What matters is how you actually work. We weigh all five tests against real court decisions, and flag close calls so you know when to take the result to a qualified IR35 specialist. This is decision-support, not tax or legal advice — you're responsible for taking reasonable care over your own status.

The court cases behind your result

IR35 is built on past court decisions. We reference the leading UK cases, so your result reflects how judges have actually ruled.

PGMOL

2024, Supreme Court

The UK's highest court confirmed that the “must offer, must accept” test matters — and must be judged contract by contract.

Atholl House

2022, Court of Appeal

The court said you must stand back and look at the whole picture: is the person really in business on their own account?

Hall v Lorimer

1994, Court of Appeal

A worker with many clients and the trappings of a real business was found to be self-employed, not an employee.

Ready Mixed Concrete

1968, High Court

The original case that set out the basic tests for employment: doing the work yourself, control, and the rest of the deal.

Express & Echo v Tanton

1999, Court of Appeal

A genuine right to send a substitute, with no strings attached, points away from employment.

These are example cases that shape how status is judged. They are not advice about your own contract.

IR35 questions, answered

Tap any question to expand.

What is IR35?
IR35 is a set of UK tax rules. They decide whether HMRC should tax you like an employee, even though you work through your own limited company. If you fall 'inside' IR35, you pay more tax. If you fall 'outside', you pay less. The rules look at how you really work, not just what your contract says.
Is the IR35 check free?
Yes. You answer a few plain questions and get your result for free. There is no card to enter and no sign-up. You see your verdict, how confident we are, and a preview of the reasoning. The full write-up and a signed status document cost £9.99.
What does 'inside' or 'outside' IR35 mean?
'Inside IR35' means HMRC treats you like an employee for tax, so you pay more tax and National Insurance. 'Outside IR35' means you are treated as a genuine business, so you keep more of your pay. Our check tells you which side you are likely on, and why.
What is a Status Determination Statement (SDS)?
A Status Determination Statement (SDS) is a document that states your IR35 status and the reasons for it. If you upgrade, we make one for you as a dated PDF. You can download it and give it to your client, agency or accountant.
How is this different from HMRC's CEST tool?
CEST is HMRC's own free tool. Its full name is Check Employment Status for Tax. It often says it cannot decide, and it does not ask about one key test that the Supreme Court has said really matters. Our check looks at all five things HMRC weighs, explains its reasoning, and flags close calls so you know when to take them to a qualified IR35 specialist before you act. It's decision-support, not tax or legal advice.
Is my IR35 result legally binding?
No result is legally binding — not even HMRC's own CEST tool. IR35 is based on past court decisions, so your real status comes from the facts of how you work. What we give you is solid evidence: your verdict, the reasons behind it, and the court cases we relied on. That is exactly what HMRC asks to see.
What happens if HMRC challenges my status?
Your paid report includes a dated SDS. It sets out the five-factor reasoning and the court cases behind your result — the kind of evidence a tax adviser would prepare. If HMRC opens an enquiry, you can hand it to your accountant or an IR35 defence provider. We do not sell tax-investigation insurance ourselves.

Ready to see where you stand?

Answer a few plain questions and get your IR35 verdict in minutes. It is free — no card, no login.

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Want the deep dive? Read the full IR35 guide for contractors 2025/26 — includes case law (PGMOL, Atholl House, Bryan Robson, Stuart Barnes, Mantides), client-size rules, the chain of liability, MTD ITSA, and contractual strengtheners.

IR35 Explained in Plain English | Nebula IR35