IR35 and UK creators: who carries the liability when you pay an influencer through their limited company

Most established UK creators do not invoice you as individuals. They invoice through a limited company, usually set up the moment brand deals turned into real income. That single fact pulls your campaign spend into the off-payroll working rules, and it parks a potential PAYE liability somewhere in your supply chain. The only question is where.

IR35 only applies when there is an intermediary

The off-payroll working rules apply where an individual supplies services to a client through an intermediary, most often their own limited company (commonly called a personal service company, or PSC). If a creator invoices you as a sole trader with nothing in between, IR35 does not apply to that engagement.

That is not the same as being safe. Sole trader engagements are still subject to ordinary employment status tests, and where a creator is supplied through an agency, separate agency legislation can bite instead. But it does mean the first question in any creator payment review is a blunt one: what legal entity is on the invoice?

Who has to make the determination

For medium and large private sector clients, the client decides. Since 6 April 2021 the end client has been responsible for assessing status and issuing a Status Determination Statement (SDS) for each engagement.

Small clients are exempt. Where the end client is small, responsibility reverts to the creator's own company, which self-assesses under the original IR35 rules. A company counts as small if it meets two of three tests: annual turnover, balance sheet total, and an average of 50 employees or fewer.

Those financial thresholds moved. For financial years beginning on or after 6 April 2025, the turnover test rose from £10.2m to £15m and the balance sheet test from £5.1m to £7.5m. The employee test is unchanged at 50.

The three tests that decide most creator engagements

Status turns on whether the creator would look like your employee if you had engaged them directly. Three factors carry most of the weight.

Control. Do you direct how, when and where the work is done? A brief that specifies deliverables, usage rights and a posting window is normal commercial contracting. A schedule that tells the creator which hours to work and signs off their process starts to look like employment.

Substitution. Could someone else do the job? For most influencer work the answer is genuinely no, because you are buying that creator's face and audience. A personal service requirement is a real indicator, and it is the one that most often surprises marketing teams.

Mutuality of obligation. Are you obliged to offer more work, and is the creator obliged to accept it? A one-off campaign with a defined deliverable is weak on mutuality. A twelve-month ambassador retainer with monthly content commitments and an exclusivity clause is a different conversation entirely.

Supporting factors matter too: who supplies the equipment, who carries the financial risk, and whether the creator works for competing brands.

The SDS is a document, not a checkbox

If you are a medium or large client, you must give the SDS to the creator and to the next party in the contractual chain, with the reasons for the conclusion. You must take reasonable care in reaching it. Fail on reasonable care and the liability sticks to you regardless of who else is in the chain.

You also have to operate a status disagreement process and respond within 45 days if the creator challenges the outcome.

HMRC's CEST tool is not mandatory, and HMRC stands behind a CEST result only where the tool was used correctly on accurate facts. Whatever method you use, keep the evidence. And keep one distinction clear: an SDS is a tax determination. It does not decide employment rights such as holiday pay, and those tests can land differently.

If a creator is inside IR35, someone runs payroll

The fee-payer, meaning the party directly paying the creator's company, must deduct income tax and employee National Insurance, and account for employer NICs and the apprenticeship levy on top. For talent agencies sitting between a brand and a roster, that is usually you. Price it in, because employer NICs are a real cost that does not appear in the creator's quoted day rate.

Since 6 April 2024 HMRC can offset tax already paid by the creator and their company against a deemed employer's PAYE liability where a status determination turns out to be wrong. That materially reduces the old double-taxation exposure. It does not make a wrong determination free.

A short checklist

• Record the contracting entity for every creator on your roster, not just the ones you paid last month.
• Confirm your own company size and, if you are medium or large, run a determination per engagement rather than per creator.
• Issue the SDS to the creator and down the chain, with reasons, before the first payment.
• Re-run the determination when the engagement changes shape, and keep the history.
• Keep the determination, the contract and the payment record joined together, so an HMRC enquiry is a search rather than an archaeology project.

That last point is where most teams come unstuck. The determination lives in a PDF, the contract lives in DocuSign, and the payment lives in the bank feed. Three years later, nobody can reconstruct the decision.

This article is general information about UK tax rules and is not legal or tax advice. IR35 outcomes depend on the specific facts of each engagement, and the rules change. Take advice from a qualified adviser before relying on any determination.