What “being in business on your own account” means and why it matters for IR35

If you’re a contractor, freelancer, or self-employed professional, you’ve probably heard the phrase “being in business on your own account” (IBOOA) in IR35 discussions. But what does it actually mean in practice, and how does it affect your IR35 status?

The simple answer: whilst it won’t guarantee an outside IR35 position on its own, it can be a strong factor in proving you are genuinely self-employed and extremely helpful to your overall position.

This guide breaks “IBOOA” down in plain English – what counts, what doesn’t, and what steps you can take to strengthen your position.

So, what demonstrates that you’re in business on your own account for IR35?

Here are some examples:

✅ Having multiple clients – if all your income comes from one client for years, that can be a red flag. A diverse client base, with many shorter term contracts helps show independence.
✅ Investing in your business – owning equipment, buying insurance, and funding your own training and/or qualifications all suggest you’re operating as a business.
✅ Marketing your services – a website, business cards, business LinkedIn presence, or paid advertising show that you actively seek work like a true business would.
✅ Employing staff and/or suppliers – employing staff or subcontractors shows that you operate as a business rather than just selling your own time. If you delegate work to others, manage payroll, or outsource specific tasks (such as admin or marketing), it supports the argument that you are running a company.
✅ Business administration – separate business bank accounts, VAT registration, business insurances, and contracts in your company’s name all demonstrate financial independence and reinforce the business-like nature of your work.
✅ Taking on financial risk – employees don’t typically deal with late payments, bad debts, or having to correct mistakes at their own expense. If you do, it suggests self-employment.
✅ Supplying your own equipment – if you use your own tools, software, or even a dedicated office space, it all points to operating as a business, not just a hired worker.
✅ Membership in trade associations – being part of an industry body or professional network can help underline your status as an independent professional.

A helpful but limited test

Being in business on your own account has always been a relevant IR35 status indicator, but its significance has fluctuated over time. There was a period when it was considered highly significant and determinative on its own in some cases, but more recent IR35 case law has shown it is viewed as just one piece of the puzzle. The courts will always seek to establish the “overall picture” to determine employment status, taking into account various factors such as:

• Control – how much say does your client have over how, when, and where you work?
• Right of substitution – can you send someone else in your place to do the job?
• Financial risk – are taking on financial risk, such as funding costs or being liable for negligence and defective work?
• Part & parcel – were you ever employed by the client, or do you carry out a long-term BAU role within their organisation?

Ultimately, IR35 applies to “relevant engagements”, meaning each case is assessed individually based on the specific circumstances of the contract in question.

So, while being in business on your own account is not IR35 determinative on its own, it can certainly help tip the scales in your favour.

Lessons from IR35 Case Law

Several high-profile IR35 cases have reinforced the role of IBOOA:

✅ Kaye Adams (Atholl House Productions Ltd) – Outside IR35
The Court of Appeal acknowledged that Adams had been in business for over 20 years with multiple income streams, which contributed to her winning the case. However, the ruling also made it clear that being IBOoOA alone isn’t enough – you need other strong supporting factors.
❌ Paul Hawksbee (Kickabout Productions Ltd) – Inside IR35
Despite some creative freedom, Hawksbee’s long-term exclusive contract with Talksport and lack of financial risk made him look more like an employee.
❌ Eamonn Holmes (Red White & Green Ltd) – Inside IR35
Holmes lost because he worked with ITV for over 15 years, had no right of substitution, and enjoyed employee-like perks such as paid time off and a company car.

The key lesson? IBOOA is helpful, but only when combined with other strong indicators of an outside IR35 position.

Common misconceptions

🚫 “I have a business website, so I’m automatically outside IR35.”
➡️ Not necessarily. A website is great, but it won’t outweigh other IR35 factors like control and rights of substitution.
🚫 “I work through a limited company, so I can’t be inside IR35.”
➡️ IR35 applies to PSCs (personal service companies), and Partnerships. Your company structure alone doesn’t determine your status.
🚫 “I pay for my own equipment, so I’m safe.”
➡️ While financial investment helps, it’s only one factor. If your client still controls what you do and how you do it, IR35 could still apply.

Practical steps to strengthen your IBOOA position

✅ Get your contracts reviewed – make sure they reflect your actual working practices and contain strong substitution clauses on lack of control and rights of substitution.
✅ Diversify your client base – if possible, avoid relying on a single client for long periods.
✅ Actively market your business – maintain a website, business LinkedIn, showcase testimonials, and seek work beyond just referrals.
✅ Keep evidence of financial risk – document bad debts, insurance payments, and investment in equipment.
✅ Ensure your business operations are distinct from employees – avoid using client equipment, email addresses, or systems unless absolutely necessary.

Final thoughts on being in business on your account for IR35

Being in business on your own account is still an important factor in IR35 cases, but it’s not enough on its own. HMRC and the courts look at the overall picture, considering control, rights of substitution, mutuality of obligation, and financial risk alongside IBOOA.

If you want to stay on the right side of IR35, take proactive steps to structure your business properly, review your contracts and working practices, and maintain a clear distinction between your work and traditional employment.

And if in doubt – get expert advice. IR35 is complex, and getting it wrong can be costly.

Need expert advice? Bauer & Cottrell is here to help with all aspects of IR35, from IR35 contract reviews to engager IR35 status determinations. Browse our full range of services here.