Most established UK creators do not invoice as individuals. They invoice through a limited company, usually set up the moment brand deals turned into real income. That one fact can bring a campaign inside the off-payroll working rules, better known as IR35.
IR35 on its own is old news. What makes it hard in creator marketing is the chain. A single campaign can run from a brand, through a media agency and a talent agency, to a creator's own company. The rules split the work between those parties: one decides the creator's status, others pass the decision down, and one of them may have to run PAYE. These are often not the same business.
The party that decides a creator's IR35 status is often not the party that pays them.
When IR35 applies to creators
IR35 is only relevant where the creator provides services through an intermediary, such as their own limited company. A sole-trader creator is outside IR35, but that does not mean the engagement is automatically self-employed.
A creator who invoices as a sole trader can still be an employee for tax purposes if the working relationship looks like employment, and where a sole trader is supplied through an agency, separate agency rules can apply instead. So the first question in any creator payment review is a blunt one: what legal entity is on the invoice?
Most talent agencies cannot answer that across their full roster without opening a spreadsheet. If that is you, start there. Record the legal entity for every creator at onboarding, because everything below depends on it.
How responsibility moves down the chain
The off-payroll rules work as a chain of handoffs. Get the order clear and the rest of the article follows.
Client decides
Status, with reasons
SDS issued
To creator and next party
SDS passed down
By each party in the chain
Deemed employer
Usually the fee-payer
PAYE
Only if inside IR35
If the creator is inside IR35, the deemed employer deducts tax and National Insurance before paying the creator's company.
Two definitions do most of the work:
- The fee-payer is the party immediately above the creator's company in the contractual chain: the business that pays the creator's company.
- The deemed employer is the party that must actually operate PAYE if the creator is inside IR35. HMRC says it is the lowest "qualifying" party above the creator's company. To qualify, that party must be UK resident or have a UK place of business, must have received the SDS, and must not be controlled by the creator. It is often the fee-payer, but not always.
Status determination and tax withholding are different jobs. The client does the first. The deemed employer does the second.
Who is who in a creator campaign
Take a common set-up: a brand hires a media agency, the media agency books creators through a talent agency, and the talent agency pays each creator's limited company after taking its commission.
| Party | Role under the off-payroll rules | What it must do |
|---|---|---|
| Brand | Usually the client, as the business receiving the creator's services | Decide status with reasonable care, issue the SDS with reasons, run the disagreement process |
| Media agency | Agency in the chain | Pass the SDS down. If it doesn't, it becomes the deemed employer |
| Talent agency | Fee-payer, and usually the deemed employer if it is UK based and received the SDS | Operate PAYE if the creator is inside IR35 |
| Creator Ltd | The intermediary | Receives the SDS and can challenge it |
Three things shift this picture in practice:
- Who the client is depends on the contracts. Where an agency contracts to deliver the content itself, it may be the client rather than the brand. The chain is defined by who contracts with whom, not by whose logo is on the post.
- A missing SDS moves the liability. HMRC's guidance is direct: if you receive an SDS but do not pass it on, you are the deemed employer. Until the client shares the SDS, PAYE responsibility stays with the client.
- An overseas fee-payer pushes it up the chain. If the party paying the creator's company has no UK residence or place of business, it cannot be the deemed employer, and responsibility moves to the next qualifying UK party above it.
If tax goes unpaid lower down, HMRC can also transfer the debt up the chain: first to the agency that contracts directly with the client, and then to the client itself where there is no realistic prospect of recovering it from anyone else.
Who has to make the determination
Since 6 April 2021, medium and large private sector clients have been responsible for deciding status and issuing a Status Determination Statement (SDS) for each engagement. The rules also apply to all public sector clients.
Small clients are exempt. Where the client is small, the creator's own company decides status under the original IR35 rules. If the brand is based wholly overseas, the off-payroll rules do not apply to it, and the creator's company decides instead. A subsidiary of a medium or large group is treated as medium or large too.
A company is small if it meets at least two of three conditions. For financial years beginning on or after 6 April 2025, those are:
£15m
Turnover or less, up from £10.2m
£7.5m
Balance sheet total or less, up from £5.1m
50
Employees or fewer, unchanged
Don't stop issuing determinations yet
Company size changes only after the thresholds are met or exceeded for two consecutive financial years, and the off-payroll rules follow the filing deadline for those accounts. RSM's analysis is that the new thresholds will likely start to take effect for most clients from the 2027/28 tax year, and HMRC has said it will update its guidance. If you are a client and think you have become small, you must also tell the creator and the deemed employer before the tax year starts, or you are treated as medium or large for that engagement. Confirm your timing with your accountant.
The three tests that decide most creator engagements
Status turns on whether the creator would look like the client's employee if they had been engaged directly. Three factors carry most of the weight.
Control. Does the client direct how, when and where the work is done? A brief that sets deliverables, usage rights and a posting window is normal commercial contracting. A schedule that sets the creator's working hours and signs off their process starts to look like employment.
Substitution. Could someone else do the job? For most creator work the answer is genuinely no, because the brand is buying that person's face and audience. Personal service is a real indicator of employment, and it is the one that most often surprises marketing teams.
Mutuality of obligation. Must the client offer more work, and must the creator accept it? A one-off campaign with a fixed deliverable is weak on mutuality. A long retainer with monthly commitments is a different conversation.
Supporting factors matter too: who supplies the equipment, who carries the financial risk, and whether the creator works for competing brands.
Here is why two "influencer campaigns" can land in different places:
| Creator A: one campaign | Creator B: ambassador deal | |
|---|---|---|
| Contract | £5,000 for a fixed set of deliverables over 30 days | 12-month exclusive ambassador agreement |
| Control | Creator decides how the content is made | Brand sets the content calendar and working schedule |
| Personal service | Required | Required |
| Future work | No obligation either way | Monthly content the creator must deliver |
| Other clients | Works with other brands | Exclusivity clause |
| Likely direction | Likely outside IR35, subject to a full review of the facts | Materially higher risk of being inside IR35 |
Neither example is a determination. Both creators provide personal service, but they differ on control, ongoing obligations and exclusivity. Those differences, and the evidence for them, are what an SDS has to explain.
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 party you contract with, with your reasons. You must take reasonable care in reaching it. If you don't, the tax and National Insurance stay your responsibility, whoever else is in the chain.
You must also run a status disagreement process. If the creator or the deemed employer challenges the SDS, you have 45 days from receiving their representations to respond. Miss that deadline and PAYE responsibility for further payments moves to you, even if your original determination was made with reasonable care.
Keep one more distinction clear: an SDS is a tax determination. It does not decide employment rights such as holiday pay, and those tests can land differently.
CEST isn't the compliance record. The evidence is.
HMRC's Check Employment Status for Tax (CEST) tool is not mandatory, and HMRC will stand by its result only if the information entered was accurate and the tool was used in line with its guidance.
That is where most teams come unstuck. The problem is rarely a missing PDF of the CEST result. It is the question that comes three years later: why did you answer those questions that way? By then the person who ran the campaign has left, the contract has been amended, the determination lives in a shared drive, the contract in an e-signature tool and the payment in a bank feed, and nobody can reconstruct the decision.
A determination you cannot explain three years later is not much of a determination.
If a creator is inside IR35
The deemed employer must deduct income tax and employee National Insurance from each payment to the creator's company, and pay employer National Insurance and, where it applies, the Apprenticeship Levy on top. Those employer costs cannot be deducted from the creator's payment. For a talent agency sitting between a brand and its roster, that is often you, so price it in: employer National Insurance is a real cost that does not appear in the creator's quoted fee.
6 April 2021
Medium and large private sector clients become responsible for status determinations.
6 April 2024
HMRC can set off tax already paid by the creator and their company against a deemed employer's liability.
6 April 2025
Higher small company thresholds apply to financial years starting on or after this date.
2027/28 tax year
When the new thresholds are likely to start changing status for most clients, per RSM.
Since 6 April 2024, where HMRC assesses a deemed employer for getting it wrong, it can reduce the bill by tax and National Insurance the creator and their company already paid on the same income. That is not automatic: HMRC must be satisfied the conditions are met and direct the set-off. It reduces the old double-taxation exposure. It does not make a wrong determination free.
Keeping one record across the chain
The practical requirement is not simply to produce an SDS. You need to keep the link between the engagement, the determination, the evidence behind it, the contract, every version of each, and the payments that followed, for every creator, across every party in the chain.
That is what StrideHQ is built to manage. Each engagement holds its determination and the answers behind it, the SDS and who it was sent to, the signed contract and every payment made against it, on one record with a full audit trail.
A short checklist
Record the contracting entity for every creator on your roster, not just the ones you paid last month.
Map each campaign's contractual chain and agree in writing who is the client, who is the fee-payer and who is the deemed employer.
If you are a medium or large client, make a determination per engagement, not per creator, and issue the SDS with reasons before the first payment.
If you are an agency in the chain, pass every SDS down promptly and keep proof that you did.
Re-run the determination when the engagement changes shape, and keep the history.
Keep the determination, the evidence, the contract and the payments joined together, so an HMRC enquiry is a search rather than an archaeology project.
Every creator engagement, with the paperwork attached.
See how StrideHQ keeps each determination, its evidence, the contract and the payments on one record, across every party in the chain.
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.
Sources
- HMRC: Off-payroll working for clients, updated 30 August 2024
- HMRC: Deemed employer responsibilities under off-payroll working rules, updated 8 August 2024
- HMRC manual: ESM10017, off-payroll working and the contractual chain
- HMRC manual: ESM10018, responsibilities of agencies and other parties in the chain
- HMRC manual: ESM10014, reasonable care
- HMRC manual: ESM10015, client-led status disagreement process
- HMRC manual: ESM10016, client ceasing to be medium or large
- HMRC manual: ESM10037, setting off tax and National Insurance already paid
- HMRC: Check employment status for tax
- RSM: Impact of the small company threshold change on off-payroll working rules, 4 July 2025
- RSM: Liability transfer rules