Outside IR35
When a contractor is classified as working "outside IR35," it means that their engagement with a client is a genuine business-to-business relationship. Contractors outside IR35 have greater flexibility and autonomy over their working arrangements. Financially speaking, working outside IR35 means that the contractor will not be liable for Income Tax and National Insurance Contributions at the rate of employment. They will be paid in gross by the client, be able to withdraw funds from their business in a way that suits them, and be responsible for paying their own tax, similar to any other small business owner.
In summary, being outside IR35 means that the contractor is operating as a genuine business, and therefore operating outside of the IR35 rules. They are considered a genuine contractor and truly self-employed, with the responsibility of ensuring that they are paying the right amount of national insurance and tax on the money that they receive for their work.
