IR35 is a UK tax rule ensuring correct taxation for freelancers operating through a Personal Services Company (PSC) when working like employees. Clients must assess worker status and may need to shift freelancers to Upwork Payroll if IR35 applies. Freelancers receive a Status Determination Statement and can challenge it if needed.
For clients:
If you're a medium or large business with a UK presence, you're responsible for determining whether a freelancer would count as your employee if they didn’t use a PSC. You can use HMRC’s tool to help.
- If the freelancer qualifies as an independent contractor, carry on as usual.
- If they’d be an employee, email us at legalnotices@upwork.com with the details. We’ll help you switch the freelancer to Upwork Payroll so the right taxes are handled.
For freelancers:
If your client meets IR35 conditions, they’ll decide your worker status and send you a Status Determination Statement (SDS). You can challenge the SDS if you disagree. It's best to talk to your own tax advisor for help navigating this.
This article is for general information only and should not be considered tax advice. It may not be updated in real time and may not reflect recent changes. We strongly encourage you to consult your country’s tax authority or your tax advisor with questions related to your specific situation.