If you engage freelancers, the NDA you ask them to sign is a small but real part of your IR35 hygiene. It will not, by itself, decide anyone's tax status — but careless wording can quietly undermine an outside-IR35 position. This guide explains the relationship between IR35 and NDAs, and how to keep the language clean. It is general information, not tax or legal advice.
NDASafe is a document preparation service, not a law firm. Our templates are legally reviewed against applicable UK law at the point of release, but every situation is different. Where significant value, unusual risk or a cross-border element is involved, take independent legal advice before you sign.
What IR35 is, briefly
IR35 — the off-payroll working rules — asks a single question: if you stripped away the contractor's limited company, would the relationship look like employment? If yes, it is "inside IR35" and taxed broadly like employment. If no, it is "outside IR35".
The answer turns on the reality of the engagement, not the paperwork alone. The main tests are control (how much the client directs the work), personal service and substitution (whether the individual must do the work personally or can send a substitute), and mutuality of obligation (whether the client must offer work and the contractor must accept it).
No clause in any agreement determines IR35 status by itself. HMRC and the tribunals look at how the engagement actually works. Treat the NDA as one consistent signal among many — not a status solution.
How an NDA can point the wrong way
Because status evidence is drawn from the whole relationship, an NDA written as if the contractor were an employee can be unhelpful. Watch for:
- Employment language. Referring to the contractor as "staff", to "employment", or to internal HR policies as if they bind the contractor.
- Personal-service wording that assumes only this named individual can ever do the work, with no scope for substitution.
- Open-ended obligations that read like an ongoing duty to be available, echoing mutuality of obligation.
- Signing the client's employee NDA — the clearest mismatch of all.
What a freelancer NDA should do instead
- Treat the parties as independent, and state expressly that nothing in the agreement creates an employment relationship.
- Where appropriate, contract with the freelancer's limited company rather than the individual.
- Use confidentiality wording that protects your information without importing employee-style controls.
- Handle IP and pre-existing materials properly: the client gets what it pays for in the deliverables, while the contractor's pre-existing IP stays theirs under licence.
- Keep it separate from the engagement contract — the NDA is about confidentiality, not the terms of the work.
IP and confidentiality for contractors
Unlike an employee — where work created in the course of employment generally vests in the employer automatically — a contractor's IP does not transfer by default. That makes the IP and confidentiality wording in a freelancer arrangement more important, not less. A good freelancer NDA assigns or licenses the project IP clearly while leaving the contractor's background IP with them, which also reinforces the independent, outside-IR35 character of the relationship.
The NDASafe Freelancer NDA template uses IR35-aware, explicitly non-employment language, handles both individual and limited-company contractors, and includes IP and optional non-solicitation provisions.
Freelancer/Contractor NDA with IR35-aware language, IP assignment and optional non-solicitation. £29, instant editable Word download — or £79 for all eight templates.