The Secret Contactor: Is it worth taking an inside IR35 role?
- 26 Jul 2023
- The Secret Contractor

In this secret contractor blog, an anonymous IPSE member shares their experience of taking an inside IR35 role for the first time and debates whether it’s worth it.
I’ve been freelance for over 20 years now and I have recently found myself in my first ‘inside IR35' role. This left me wondering whether it’s worth it. A higher fee for the work is all well and good, but exactly how much more money is required to work on an inside IR35 engagement to break even, compared to a regular ‘outside’ commercial contract for services.
Below, I share my experience of operating on an inside IR35 engagement for the first time, how it came about, whether I charged enough for my services and the tricky conversations I was forced to have with my accountant as a result.
How the inside IR35 offer came about
Having completed a two-year-or-so programme of works with a household-name insurer, to improve their cyber-security posture, I was approached by an ‘associate-of-an-associate’ about some cyber-security assistance needed from a major player in the energy sector.
To be honest, the way it was pitched to me, it flattered my ego somewhat and after discussions with stakeholders at the organisation I was indeed very keen to be part of the programme.
All seemed positive but then it was explained to me that they would only offer an ‘inside IR35’ engagement. I baulked at this… explained as politely as I could that that wasn’t the environment I operated in and highlighted what I thought was a ridiculous amount of money required if I were to take on this engagement ‘inside IR35’. To my surprise, they agreed.
This put me on the spot somewhat. I found myself having a long discussion with my accountant to see if I would not be worse off financially at the end of this engagement (despite the inflated rate), than via a more commercially based contract at the typical rates I charge.
At this point, I shared my predicament with IPSE and we agreed that a series of blogs reviewing this very new experience could be interesting to fellow IPSE members, many of whom are likely to have previously considered or be considering inside IR35 engagements themselves.
In particular, I wanted to review this work in enough detail to get some indication as to exactly how much more money was required on an 'Inside IR35' PAYE engagement to break even, compared to a regular 'outside' commercial contract for services.
In order to be as candid and specific as possible around the details, I shall of course have to remain anonymous, and not name the client, agency or umbrella company.
Over the course of this series of blogs, I shall take a look at the contract and perhaps invite some commentary on it from IPSE’s tax partners, Markel, and of course, 'roll the numbers' in detail.
Did I charge enough to cover the additional costs of an inside IR35 engagement?
So... how much have I raised consultancy fees by, and would that be enough to 'see me right' at the end of the financial year?
Although, as many freelancers will no doubt attest to, the fees my company normally charge for my time are often dictated, especially for new clients, by their available budgets - often ably guided, I’m told, and sagely advised, I’m assured, by the recruitment agencies they have engaged.
Typically though, my limited company might charge £600 per day plus VAT. By raising this fee by 50% to £900 per day, I thought that would quickly end discussions on this particular assignment.
In hindsight, it seems I ‘sold myself too cheaply’. The subsequent long discussion I had with my company’s accountant as to how this fee would leave me, and the company, at the end of the 23/24 tax year concluded in a ’it depends’…
It would have been a whizz for the accountant to give me a ‘yes/no’ if I were closing my business down. However, the business was going to still run, pursuing various business opportunities and fulfilling various contractual obligations around lease arrangements, insurances etc.
I think this foray into the world of PAYE has quickly taught me my first lesson... my company needs to change accountants…
In part two of this series, I’ll take a look at the contract I received. It is indeed a very different ‘binding script’ to what I have been used to.
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