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United Kingdom: IR35

IR35, also known as Off-Payroll Working Rules, may apply when freelancers in the U.K. form a personal services company (PSC). A PSC is a small business that allows a worker to provide services independently. Under IR35, clients with a medium- to large-sized business in the U.K. must determine whether a freelancer registered as a PSC would be an employee of theirs if no PSC existed. If clients determine the freelancer would be an employee of theirs, then clients must withhold the appropriate tax.

Freelancers

If you are a freelancer registered as a PSC in the U.K., and your client is a medium- to large-sized business, then your client is required to determine your employment status. Once clients make their determination, they will present it to you in a status determination statement.

Clients

The U.K. government provides this tool to help you make a determination on employment status. If you determine your freelancer is an independent contractor, you may continue with your project as usual on Upwork. If you determine your freelancer is an employee, you can email Upwork at legalnotices@upwork to notify us of the designation. If you wish to continue with the project on Upwork, you will be required to use Upwork Payroll, so the appropriate taxes are withheld.

Please note that this information is for general guidance only, and for specific tax advice, consult your country's tax authority or a tax advisor.