Ndubuisi 'Andy' EgwimMoney Coach for Medics|Ex-NHS GP|21+ Yrs Investor| Founder, MoneyWiseDoctor.com|Helping Medics Avoid Big Money Mistakes

Do You Carry Real Financial Risk? HMRC Wants to Know

16 Aug 2026 · 1 min

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1:25

In this video, Ndubuisi 'Andy' Egwim explains how HMRC evaluates off‑payroll (IR35) status by looking at a range of commercial risk factors. Using a plumber as a concrete example, he outlines the types of financial risk a genuine business bears—such as tool and equipment costs, insurance, transport, staff, pricing decisions, potential loss from faulty work, and lack of sick pay. He contrasts this with an employee who receives a fixed wage and does not shoulder these commercial risks. Andy emphasizes that HMRC considers multiple elements—financial risk, equipment ownership, opportunity to profit, sick‑pay provisions, and others—without relying on a single checklist, to determine whether a worker is truly self‑employed or an employee for tax purposes.

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HMRC considers factors like financial risk, equipment, the opportunity to profit, sick pay, and several other factors when assessing IR3530. So let's look at some of the other things like financial risk. So my plumber has business expenses. Of course, he has tools, he has to take out insurance, he has transport, some— maybe some staff. He has to price the work appropriately. If he prices the job poorly, he might make less profit. Maybe even a loss. If his work was faulty and he had to return to correct it without another payment, he could lose time, maybe a bit of money, maybe a lot of money. So there's risk. If he was ill and did not work, even if he's great, and I really think he's a fantastic guy, I would not normally pay him for that day. So there's no sick pay. So there's a risk, financial risk. Now, those are examples of financial risk that you can see in a business. Someone operating a genuine business may have the chance to make more profit through good management. They may also risk making a loss through poor management or circumstances. An employee is normally paid an agreed amount and does not personally carry the commercial risk of whatever the employer makes money— whether the employer makes money or not, that's not the issue. HMRC considers factors like financial risk, equipment, the opportunity to profit, sick pay, and several other factors when assessing IR3530s. No single checklist can determine the answer.