Off-payroll rules decide the economics
Consultancy & Professional Services Setup in the United Kingdom
A UK consultancy needs no licence. What determines whether it works financially is the off-payroll rules.
GCC business setup specialists
Your client may decide your tax treatment
Where you provide services through your own company, the off-payroll working rules can require the engagement to be taxed as employment. For most private sector engagements the client decides that status, not you — and a client that determines inside-scope status changes your net position substantially. Understanding this before you price work, and before you sign, is the whole commercial question.
- Off-payroll exposure assessed before you price engagements
- Structure chosen on your actual client mix
- Insurance and contract requirements covered
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Companies successfully established.
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Understand the position
What the off-payroll rules mean for you
Who decides, and what follows.
| Question | Position |
|---|---|
| Who determines status? | Usually the client, for private sector engagements. |
| What does inside scope mean? | The engagement is taxed broadly as employment. |
| Does it affect small clients? | Smaller clients are treated differently; the test shifts. |
| Does my contract settle it? | No. Actual working practice governs. |
| Can I challenge a determination? | There is a status disagreement process. |
| Does it apply to overseas clients? | The position differs and needs checking. |
The off-payroll working rules, the small client exemption and the status tests are set by legislation and HMRC guidance and change. Your engagements are assessed against the rules in force, and status advice on a specific contract may warrant specialist input.
How it works
Setting up the practice
Status first, then structure.
01
Assess your engagements
How you work in practice, who your clients are and whether engagements are likely to fall inside or outside scope.
02
Choose the structure
Limited company, sole trader or a mix, decided on your client profile and the status position rather than by default.
03
Set up and operate
Company formed, VAT and payroll assessed, professional indemnity arranged and accounting set up to handle both inside and outside engagements.
To get started
What we need
How you actually work matters more than the contract wording.
- What services you provide
- Who your clients are and their size
- Whether you work for one client or several
- Whether you can send a substitute
- How much control the client has over how you work
- Whether you provide your own equipment
- Whether you take financial risk on the work
- Expected fee income
- Whether clients are UK or overseas
- Whether you will employ or subcontract
- Professional indemnity requirements
- Whether any client has already made a status determination
Scope
What is included, and what is not
Stated plainly, so nothing is added once the engagement starts.
Included in the service fee
- Off-payroll exposure assessment across your engagements
- Structure recommendation on your client mix
- Company formation
- VAT assessment and registration where required
- Payroll set up where needed
- Accounting able to handle inside and outside engagements
- Guidance on insurance requirements
- Review when your client mix changes
Not included, quoted separately
- Companies House and HMRC fees, paid at cost
- Formal status opinions on specific contracts
- Professional indemnity premiums
- Professional body memberships
- Contract drafting or review by a lawyer
- Status disagreement representation
- Marketing and business development
- Clients’ determinations, which are theirs to make
Verify independently
Relevant UK authorities
We file directly with these bodies on your behalf.
HM Revenue & CustomsCompanies HouseLocal authority licensing and planningEnvironment AgencyInsolvency ServiceOffice for Product Safety and Standards
Questions
UK consultancy setup — FAQs
What are the off-payroll working rules?
Rules that can require an engagement provided through your own company to be taxed broadly as employment. For most private sector work the client makes the determination.
Can I avoid them by wording the contract carefully?
No. Actual working practice governs, not the paperwork. A contract inconsistent with how you really work offers no protection.
Does it matter if my client is small?
Yes. Smaller clients are treated differently and the responsibility shifts, which changes the analysis for your engagement.
Should I still use a limited company?
Often yes, for liability, credibility and flexibility across engagements. The right answer depends on your client mix, which is why we assess it rather than assume.
Do overseas clients change the position?
The position differs where the client is outside the UK and needs checking for your specific arrangement rather than assumed either way.
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