Why there is no such thing as an ‘IR35 accountant’

You may have encountered this phrase if you’ve searched the web for a new accountant. Given the financial impact IR35 can have on your post-tax income, can an ‘IR35 accountant’ provide some kind of magic solution?

Unsurprisingly, the answer is ‘no.’ The term ‘IR35 accountant’ doesn’t actually exist. Instead, it’s a phrase coined by accountancy firms to market their services or cater to the whims of Google’s search algorithm.

An accountant doesn’t have a magic wand to keep clients outside IR35 because employment status is determined by HMRC’s legal framework and a contractor’s working conditions, not accounting conventions.

Here’s why an accountant alone can’t guarantee IR35 compliance:

1. IR35 is based on employment status

• IR35 status is based on working practices and the contractual relationship between contractors and clients.
• The key factors influencing IR35 status remain control, substitution, and mutuality of obligation (MOO).
• If HMRC determines that a worker acts like an employee in all but name, IR35 will apply regardless of contract wording.

2. Determination is clientlLed, not accountant-led

• Since the off-payroll rules came into play in 2017 (public sector) and 2021 (private sector), the end client usually determines IR35 status.
• Under the original IR35 rules (which still apply to ‘small companies’), contractors self-certify their IR35 status.
• Even the most skilled accountant can’t influence a client’s IR35 status determination.

3. HMRC investigations look beyond the paperwork

• An accountant might help ensure that contracts are well-drafted, but the crucial determinant is how the contractor works in practice.
• If your day-to-day working practices mirror employment (e.g., fixed hours, no autonomy, no financial risk), HMRC can deem the contract inside IR35 despite any contract wording.

4. Blanket determinations & risk-averse clients

• Many large clients are risk-averse and apply blanket IR35 determinations to avoid potential tax liabilities. Some clients don’t take on limited company contractors at all.
• An accountant cannot override these decisions or force clients to reassess their stance.

5. IR35 is subjective and case-by-case

• There is no one-size-fits-all formula for IR35. Each contract and working arrangement is unique.
• Even if an accountant advises on best practices, ultimate compliance depends on how HMRC interprets the relationship.

6. HMRC challenges and tax liabilities

• If HMRC challenges a contractor’s IR35 status and finds they should have been inside IR35, the tax liabilities can be significant.
• Accountants can help mitigate risk but can’t prevent HMRC from challenging a contractor’s working arrangements.

What an accountant can do

While they don’t have a magic wand, an experienced accountant can:

• Review contracts to ensure they indicate an outside-IR35 arrangement. This work is usually done by a third party (employment status specialist).
• Advise on working practices to mirror the working arrangements contained in the contract.
• Help with tax planning to manage financial risk – whether your work is inside or outside IR35.
• Support contractors in case of an HMRC investigation
• Recommend IR35 insurance for added protection – especially if you’re operating the ‘original’ IR35 – where the liability sits with the contractor, not the client.
• Accurately calculate your tax and deemed payment if IR35 catches your contracts

In summary

A specialist accountant is a valuable advisor, but IR35 compliance is fundamentally about how you work, not just how your finances are structured.

No accountant can guarantee an outside IR35 status if your working arrangements don’t support it.