IR35 in practice: small clients

If your end client is classed as a small private sector company, then you’ll take responsibility for determining IR35 status yourself, you will pay the appropriate taxes if you’re inside IR35, and be liable for taxes, penalties and interest should HMRC deem that you have made an incorrect determination.

There is a statutory definition of a small company, and if your client meets two or more of the following conditions then they’re likely to be a small company:

  • A turnover up to £10.2m
  • Balance sheet assets up to £5.1m
  • Average number of employees up to 50

If you are engaging with a small end client we recommend that you continue to take care in determining your IR35 status. We recommend using a third-party specialist to review your contract and working practices.

Explore our demo company and
discover cloud-powered accountancy

Our innovative cloud-powered service is revolutionising accountancy for contractors and freelancers. Find out how by exploring our demo company now
Get your demo account


We're a multi-award winning, innovative accountancy practice who use cloud technology to deliver an efficient, accurate and reliable accountancy service to contractors, freelancers and small businesses.

Stay in the loop

Get expert tips on tax savings, IR35 plus much more straight to your inbox every 6 weeks.

By clicking submit you agree to our privacy policy
AAT ACCA accountants


inniAccounts Ltd
1 Derwent Business Centre
Clarke Street

Registered in England


0800 033 7827

Calling from overseas
+441332 460 010

Contact us

Contact inniAccounts



0800 033 7827

Calling from overseas

+441332 460 010

Live Chat

Sorry, we're currently offline

Please note: at this time live chat can only be used for sales enquiries, not support

Start chat