How HMRC applies IR35 to long-term UK brand deals for creators

What to take away

What IR35 off-payroll working means for long-term brand partnerships

IR35 off-payroll working rules exist to stop contractors paying less tax than employees for doing the same job. If you run a limited company and a brand pays your company for an ongoing role, HMRC may treat you as a disguised employee.

A one-off sponsored post rarely looks like employment. A retainer with weekly deliverables, set hours and a manager who directs your edits starts to look different. The longer the deal runs, the more HMRC can compare it to a job.

For creators, the key question is whether the brand controls what you do, when you do it and how you do it. If the answer is mostly yes, the fees may be taxed as salary, with PAYE and National Insurance due.

Off-payroll working rules apply to medium and large private-sector clients, and to all public-sector clients. Small clients outside the public sector are exempt, but the creator's own company still has to apply IR35 to its contracts. You can read the basics in HMRC's guide to understanding off-payroll working (IR35) Understanding off-payroll working (IR35) - GOV.UK.

The tax cost of an inside determination can be large. Using published 2025/26 rates, a £4,000 monthly retainer gives £48,000 a year. Inside IR35, the fee payer deducts employer NIC, PAYE and employee NIC. The net to the director is about £33,400.

The table below shows the same £48,000 outside IR35. The company pays corporation tax, then the director takes dividends. The net is about £36,600. The difference is about £3,200 a year.

These figures are illustrative. They assume no expenses, no other income and full distribution. Your own figures depend on your salary, dividend mix and tax year.

Long-term deals are riskier because they build a pattern. A twelve-month retainer with a fixed monthly fee and regular reporting can look like a part-time job. A series of separate campaigns with separate briefs looks more like a business.

The contract is the first thing HMRC reads. It is not the only thing. HMRC will also look at emails, Slack messages, content calendars and payment records. Your creator tax commercial contracts should match how you actually work.

Inside and outside IR35: the tests HMRC actually applies

HMRC does not use a single checklist. It weighs a set of factors and asks whether the relationship would be employment if there were no company in the middle. The main inside and outside IR35 tests are control, substitution, mutuality of obligation, financial risk and part and parcel of the organisation.

Control concerns who determines which work is carried out, along with when and how it is done. If the brand sets your hours, approves every draft and can move you between projects, that points inside. If you decide your own schedule and method, that points outside.

Substitution is about whether you can send someone else to do the work. A genuine right to substitute, without needing the brand's permission, points outside. A clause that says you must do the work personally points inside.

Mutuality of obligation means the brand must offer work and you must accept it. A retainer with a minimum number of posts each month creates obligation. A framework agreement where each campaign is separately agreed creates less.

Financial risk looks at whether you carry your own costs and can profit or lose from the work. If you buy your own equipment, fix defects at your own cost and invoice for a project fee, that points outside. If the brand covers all expenses and pays a fixed day rate, that points inside.

Part and parcel of the organisation asks whether you are integrated into the brand's team. A creator with a company email address, a line manager and a place in the org chart looks like an employee. A creator who delivers a campaign and leaves looks like a supplier.

No single factor decides the case. HMRC looks at the whole picture. A contract that says all the right things but is ignored in practice will not protect you.

How a long-term brand deal can look like disguised employment

Disguised employment brand deals usually share a pattern. The brand treats the creator like a member of staff while paying through a company. The longer the deal, the easier it is for HMRC to see the pattern.

A Manchester-based beauty creator signs a twelve-month retainer with a cosmetics brand. The brand pays 4,000 pounds a month to her limited company. She must post three videos a week, attend a Monday team call, use the brand's project management tool and get approval from a marketing manager before publishing.

The brand provides the products and pays for a studio. She cannot send another creator in her place.

On those facts, HMRC would likely treat the arrangement as employment. The control, the integration and the lack of substitution all point inside IR35. The monthly retainer looks like a salary.

A different pattern looks outside. A Yorkshire-based fitness creator agrees a six-month deal with a supplement brand. The brand asks for four videos a month, but the creator chooses the format, films in his own studio and uses his own equipment.

He can bring in a trusted editor to help. The brand pays a fixed project fee per video and does not reimburse expenses. There is no minimum volume beyond the agreed campaigns.

That second deal still needs a contract review, but the facts point outside. The creator carries financial risk and controls how the work is done.

The difference is not the length alone. It is whether the brand directs the work like an employer. A long deal with light-touch briefs can still be outside. A short deal with heavy control can be inside.

Creators often accept staff-like terms without noticing. A brand email address, a company laptop or a requirement to attend weekly stand-ups are all signals. If you are unsure, treat the deal as a warning sign and get advice before you sign.

Contract checks: substitution, control, mutuality of obligation and financial risk

Contract checks for long-term brand deals should focus on four clauses. Read them together, not in isolation. A strong substitution clause will not save a contract that gives the brand total control.

The definitions are set out in the tests section above. Use the contract to make the written terms match the working reality. These two model clauses are a starting point.

Substitution clause: The Supplier may provide a suitably qualified substitute to perform the Services. The Client shall not unreasonably withhold or delay approval of a substitute. Approval is limited to confirming the substitute meets brand safety and confidentiality requirements. The Supplier remains responsible for the substitute's work and fees.

Approval clause: Client approval of deliverables is limited to brand safety, factual accuracy and legal compliance. The Client shall not direct the manner, hours or location of the Services.

For mutuality, use a separate statement of work for each campaign. For financial risk, invoice a project fee and provide your own equipment.

Other clauses matter too. A notice period, holiday pay, sick pay or a non-compete that applies only during the deal can all point inside. So can a requirement to work exclusively for the brand.

Get the contract reviewed before you sign. A contract review can catch clauses that HMRC would use against you. Keep the final signed version and any subsequent variations. The creator tax rules and ethics behind HMRC decisions are worth reading alongside your contract.

Working through a limited company versus a sole trader

IR35 only applies when you work through an intermediary, usually a limited company. If you are a sole trader, the off-payroll working rules do not apply in the same way. But HMRC can still argue that a sole trader is an employee if the relationship looks like employment.

As a company director, you must file accounts and a confirmation statement, keep company records and act in the company's best interests. HMRC's guidance on being a company director sets out those duties Being a company director - GOV.UK.

You also need to register the company with Companies House and file annual accounts. Companies House is the UK registrar for limited companies Companies House - GOV.UK. Late filing penalties apply.

A sole trader invoices brands directly and reports profit on a Self Assessment tax return. If a brand treats you like an employee, HMRC can still assess PAYE on the engager. That risk can make brands nervous about long sole-trader retainers.

If you operate through a company, pay yourself a salary and dividends in line with the work you actually do. Do not take all the profit as dividends if the company is really earning employment income. Our guide to creator tax foundations covers how to set the right mix.

Status determination statements and who carries the liability

For medium and large private-sector clients, and all public-sector clients, the client must decide whether the off-payroll rules apply. The client must give you a status determination statement (SDS) before the contract starts. The SDS must state the conclusion and the reasons for it.

If the SDS says the rules do not apply, the client is saying the role is outside IR35. If it says the rules do apply, the client must deduct PAYE and National Insurance from your company's fees. The SDS must be passed down the labour supply chain to the fee payer.

When reaching the decision, the client is required to exercise reasonable care. If it does not, and HMRC later finds the role was inside IR35, liability can move. The client becomes the fee payer and must account for the tax.

An SDS can be short. Example wording: 'We have considered the off-payroll working rules. We conclude that the rules apply to this engagement because [reasons]. The fee payer is [name].' Or: 'We conclude that the rules do not apply because [reasons].'

If you disagree with an SDS, you can ask the client to reconsider. The 45-day response clock is the current HMRC position. The client must respond within 45 days. If it does not, the client becomes liable for the tax. Keep a copy of your request and the response.

Small clients outside the public sector do not have to issue an SDS. A brand is a small client for these rules if it meets two or more of the current statutory thresholds: annual turnover not more than £10.2 million, balance sheet total not more than £5.1 million, and not more than 50 employees.

Instead, your own company must decide whether IR35 applies and account for PAYE if it does. That is a heavy responsibility. Many creator companies get this wrong.

Liability can also sit with your company if you are the fee payer in the chain. If you subcontract work to another creator's company, you may take on the client's obligations. Check the chain before you sign.

An SDS is not a free pass. HMRC can still open an enquiry and reach a different view. The SDS is evidence of reasonable care, not a final answer.

Compliance steps and evidence to keep for an HMRC enquiry

An HMRC compliance check process starts with a letter or a phone call. HMRC may ask for contracts, invoices, bank statements and emails. You should respond within the deadline and keep a record of everything you send.

If HMRC contacts you about a compliance check, you can ask for help and time to respond. HMRC's guidance explains what to do if HMRC contacts you about a compliance check Get help if HMRC contacts you about a compliance check - GOV.UK.

Do not ignore the letter. Ignoring it can lead to a determination by default. If HMRC issues a determination, the current HMRC position is that you have 30 days to appeal in writing.

During an IR35 enquiry, HMRC must follow the HMRC Charter. The Charter sets out your rights, including the right to be treated fairly and to have your case handled by someone who can help. You can read the standards in the HMRC Charter HMRC Charter - GOV.UK.

Keep evidence that shows you are in business on your own account. That includes your own equipment, insurance, marketing, multiple clients and a business bank account. Also keep evidence of how you actually worked: emails, briefs, schedules and invoices.

Use this checklist to prepare:

Keep records for at least five years after the 31 January filing deadline. HMRC can open an enquiry into a return within that window. The five-year and six-year windows are current HMRC positions. For company records, keep them for six years from the end of the accounting period.

If you use an accountant, make sure they understand IR35 and creator work. A creator tax disclosure policy can help you decide what to tell HMRC and when. Do not wait for an enquiry to get your paperwork in order.

Red flags in creator contracts that trigger IR35 review

Some contract terms make an HMRC review more likely. If you see several of them, treat the deal as high risk and get advice.

A notice period is a strong red flag. Employees have notice periods. Independent contractors usually do not. If the brand can terminate only with three months' notice, the contract looks like employment.

Holiday pay, sick pay or pension contributions are clear employment markers. If the brand offers any of these, the role is almost certainly inside IR35.

Set hours or regular team meetings are red flags. So is a requirement to use the brand's equipment or work from its office.

Exclusivity clauses can also trigger review. If you cannot work for competing brands during the deal, you look like an employee. A limited non-compete for confidential information is less risky.

A rolling contract that renews automatically for years is a red flag. It suggests an ongoing employment relationship rather than a series of projects.

A fixed monthly retainer with no link to deliverables is a red flag. A project fee tied to specific outputs looks more like business income.

If the brand can move you to different projects or change your duties without a new contract, that is a red flag. So is a requirement to report to a named manager.

If the brand pays for re shoots or fixes errors, that is a red flag.

Review every long-term deal against these red flags before you sign. If the deal is already running, review it now and consider renegotiating the terms. Document any changes in writing.

Common questions