Off-payroll working (Chapter 10)

Off-payroll working rules (sometimes called "Chapter 10" after the relevant ITEPA chapter) shift IR35 status responsibility from the contractor to the engaging client.

These rules apply to public-sector engagements (since 2017) and to medium and large private-sector engagements (since 2021). The client must issue a Status Determination Statement (SDS); the fee-payer (often an agency) must operate PAYE if the engagement is inside IR35.

For small private-sector clients (broadly: under £10.2M turnover), the original IR35 rules still apply — responsibility stays with the contractor.

Related terms

• IR35 — The UK's off-payroll working rules — they decide whether a contractor should be taxed as a deemed employee.
• Status Determination Statement (SDS) — A formal IR35 status decision issued by a client under the off-payroll working rules.
• Deemed employee — A contractor treated as an employee for tax purposes under IR35 — PAYE applies, but no employment rights.