Scrum Master IR35 Agreement Template UK
Scrum Masters operating through a Personal Service Company face significant IR35 exposure due to the collaborative, embedded nature of agile roles — HMRC frequently views daily standups, sprint planning, and team integration as indicators of employment under Chapter 10 of the Income Tax (Earnings and Pensions) Act 2003. Without a robust, IR35-aware contract in place, your engagement could be reclassified, triggering substantial tax liabilities for you or your end client. A properly drafted Scrum Master IR35 Agreement establishes clear boundaries around substitution rights, mutuality of obligation, and control — the three key pillars HMRC scrutinises during an investigation. It also protects payment terms under the Late Payment of Commercial Debts Act 1998. If you are contracting inside or outside IR35, having the right contractual foundation is critical. Generate your tailored Scrum Master IR35 Agreement now.
Generate your IR35 Agreement free →Key clauses in a IR35 Agreement
Right of Substitution
This clause establishes your contractual right to send a qualified substitute to perform Scrum Master duties in your place, which is one of the strongest indicators of genuine self-employment under HMRC's IR35 assessment framework. Without an unfettered substitution right, HMRC may treat the engagement as a contract of service under Chapter 10 ITEPA 2003, placing the role inside IR35.
Mutuality of Obligation Exclusion
This clause explicitly states that neither party is obligated to offer or accept further work beyond the agreed sprint or project deliverables, directly countering one of HMRC's primary tests for deemed employment. Clearly negating mutuality of obligation — as examined in cases such as Carmichael v National Power — is essential for Scrum Masters working on fixed-term or sprint-based engagements to maintain outside-IR35 status.
Control and Autonomy
This clause defines how, when, and where services are delivered, ensuring the contractor retains meaningful control over their working methods rather than being subject to the day-to-day direction of the client — a hallmark of employment under Ready Mixed Concrete (South East) Ltd v Minister of Pensions. For Scrum Masters, who often work closely within client teams, clearly documenting autonomy over facilitation methods and tooling is vital to an outside-IR35 determination.
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Generate free →Frequently asked questions
Does working daily within a client's development team automatically put a Scrum Master inside IR35?
Not automatically, but embedded working patterns do increase HMRC scrutiny because regular team participation can indicate supervision, direction, and control — key employment indicators under Chapter 10 ITEPA 2003. The contract must clearly reflect the contractor's autonomy over how they facilitate agile ceremonies and that attendance is driven by deliverables, not a work schedule imposed by the client. HMRC's Check Employment Status for Tax (CEST) tool and the holistic case law test both examine the reality of the engagement alongside the written contract.
Who is responsible for IR35 determination when a Scrum Master contracts with a large private sector client?
Since the April 2021 off-payroll working reforms under the Finance Act 2020, medium and large private sector clients are responsible for determining IR35 status and issuing a Status Determination Statement (SDS). If the end client determines the role falls inside IR35, the fee-payer in the labour supply chain — typically a recruitment agency — becomes liable for deducting income tax and National Insurance before paying your PSC. Small companies as defined under the Companies Act 2006 are exempt, and in those cases the PSC retains responsibility for its own IR35 assessment.
Can a Scrum Master operating inside IR35 still use a limited company to contract?
Yes, you can continue to operate through your Personal Service Company even if your engagement is determined to be inside IR35. However, the fee-payer will deduct income tax and employee National Insurance contributions at source before paying your PSC, and employer NICs will also be due on top — significantly reducing your take-home compared to an outside-IR35 engagement. Your PSC will not pay Corporation Tax on the deemed payment, and HMRC's rules under Chapter 10 ITEPA 2003 ensure the income is treated as employment income for tax purposes, so careful financial planning is essential.
The information on this page is for general informational purposes only and does not constitute legal advice. Contracto generates AI-assisted contract templates — they are not a substitute for advice from a qualified solicitor. For high-value or complex engagements, always seek independent legal review.