Being in business on one’s own account is one of the most important IR35 status tests, but it is rarely discussed in those terms outside tribunal decisions.
Judges use it as a way to step back and ask a simple question: Is this person really running a business, or are they, in practice, effectively working as an employee of the client?
It is not a single tick-box test.
Instead, it pulls together a range of indicators, including financial risk, the likelihood of making a profit, the number of clients the individual has, whether they have business assets, and how they present themselves to the market.
If viewed together, these factors help to demonstrate whether a contractor is genuinely in business on their own account.
This guide sits alongside our other status content, including IR35 employment status tests explained, our pieces on financial risk as an IR35 factor, control, mutuality of obligation and part and parcel / integration.
What does “business on own account” mean in IR35?
The phrase comes directly from case law. In Hall v Lorimer, the Court of Appeal said that deciding status involves looking at the picture as a whole and asking whether the individual is “in business on his own account”.
That principle has been repeated in many employment status and IR35 decisions since then.
In practical terms, a person is more likely to be in business on their own account if they:
- have multiple clients or at least a realistic opportunity to work for more than one client
- take on financial risk and have a chance to increase their profit by working efficiently
- own or invest in equipment, software or other business assets
- have a business identity, such as a website, branding or marketing activity
- accept that there may be gaps between engagements which they have to absorb
These are not the traits of a traditional employee. They work for one employer, do not have to pay for business overheads, and have limited opportunity to increase their income beyond their salary.
HMRC’s Employment Status Manual discusses indicators of being “in business on your own account”, including investment, risk and organisation. The courts treat BOOA as a means of bringing together all the factors, rather than a separate test in its own right.
Key BOOA indicators that tribunals pay attention to
Tribunals tend to look at patterns in a relationship rather than single details.
Some of the indicators they focus on include:
- Multiple clients or engagements. In Hall v Lorimer, the fact that the worker had many clients over time was a strong pointer towards being in business. By contrast, someone who works for one engager for years, with no real prospect of working for others, may look more like an employee.
- Financial risk and opportunity to profit. If a contractor can increase their profit by working efficiently or faces a risk of loss if a project overruns, that supports BOOA. Our guide on financial risk looks at this in more detail.
- Business assets and overheads. Owning equipment, paying for software, insurance, accountancy, marketing, and training are all signs of a genuine business, especially when these costs are not reimbursed by the client.
- Gaps between contracts. A willingness to accept some time on the bench and look for new clients between engagements is characteristic of someone truly in business. Employees usually avoid this sort of gap.
- Brand and market presence. A website, a LinkedIn profile aimed at clients, business stationery, a company name, and other marketing materials all help build the picture of self-employment.
None of these points is decisive on its own. Tribunals often stress that it is the combined effect that matters – the overall picture.
How BOOA featured in key cases
Several well-known cases show how BOOA works in practice.
In Hall v Lorimer, a vision mixer working in television had many short engagements with different clients. The court concluded that, taken together, his pattern of work, financial risk, and business behaviour made it clear that he was in business on his own account, even though each individual engagement looked modest on its own.
In the Professional Game Match Officials Ltd (PGMOL) litigation, the Court of Appeal considered whether football referees were employees of PGMOL or self-employed. One part of the analysis examined how referees operated over time, including their ability to accept or reject matches and their broader working patterns. Although BOOA was not the only issue, the level of independence in their overall arrangements was relevant.
In HMRC v Atholl House Productions Ltd (the Kaye Adams case), the courts looked at a radio presenter’s wider business activities, including work for multiple broadcasters and other media outlets. The presence of a broader media business was one of the factors supporting the view that she was in business on her own account, rather than simply an employee of a single engager.
These cases show that tribunals are willing to look beyond a single contract and consider the pattern of someone’s work across a more extended period.
Single-client contractors and BOOA
Many contractors spend long periods with a single client, which can make BOOA harder to demonstrate.
However, not having multiple clients doesn’t automatically make you an inside-IR35 prospect. However, it does reduce one of the clearer indicators of being in business in your own account.
In these situations, tribunals tend to look more closely at other BOOA factors. For example:
- Does the contractor still carry financial risk and overheads?
- Do they actively seek new clients, or do they keep their business marketed?
- Is there a real possibility of future work from other sources, even if it has not yet been taken up?
- Are they free to walk away at the end of the contract and take work elsewhere?
Contractors in long engagements may find it useful to maintain clear evidence of their business activity, rather than risk being perceived as permanent members of staff (part and parcel of the organisation).
How BOOA relates to other IR35 factors
The concept of being in business on own account pulls together many of the other IR35 tests.
It is closely linked to financial risk, integration, and the overall pattern of control and mutuality.
Someone who takes on no meaningful financial risk, is heavily integrated into the client’s organisation and has no realistic prospect of working with other clients will struggle to argue that they are genuinely in business on their own account.
On the other hand, a contractor who sets their own method of working, takes on a degree of risk, maintains a business presence and works with multiple clients over time will usually have a stronger position.
Our guides on control, mutuality of obligation and part and parcel explain how those individual factors fit into the overall picture.
For a broader overview, see IR35 employment status tests explained, which links all of these elements together.
Why BOOA still matters in off-payroll decisions
Even under the off-payroll working rules, where clients are responsible for making status determinations, BOOA remains important.
A client who only looks at control or substitution may miss the broader point that the contractor is, or is not, running a genuine business.
Reasonable care requires clients to consider the full range of relevant factors. Looking at whether someone is in business on their own account helps avoid narrow or box-ticking approaches to status.
It also makes determinations easier to defend if they are later challenged by HMRC.