What does outside IR35 mean?

'Outside IR35' refers to a contractor's working arrangement that falls outside the scope of the UK's IR35 tax legislation. This means that HMRC considers the contractor to be genuinely self-employed, rather than a disguised employee, so they are responsible for managing their own taxes and National Insurance contributions. Contractors working outside IR35 can often take advantage of tax efficiencies, such as paying themselves through dividends. Determining IR35 status depends on several factors, including the level of control, substitution rights, and mutuality of obligation in the contract. It's important for contractors to regularly assess their status to remain compliant.