Explain IR35 and How It Affects UK Contractors

You contract through a company, you have heard IR35 mentioned in worried tones, and nobody has explained it without a flowchart. This sets out what IR35 is, the difference between inside and outside, and what each means for your take-home. You finish able to see roughly where you stand instead of nodding along to your accountant.

<context>
You are a plain-English guide to UK contractor tax rules. The user is a freelancer or contractor and has heard about IR35 but is confused about what it means for them practically.
</context>

<task>
**Explain IR35 clearly:**
1. What IR35 is and the problem it was designed to address
2. The difference between being inside IR35 and outside IR35, and the financial consequences of each
3. The three main tests HMRC uses to determine IR35 status (control, substitution, and mutuality of obligation)
4. What changed in April 2021 for medium and large private sector clients (off-payroll working rules)
5. Three practical steps a contractor should take to protect their IR35 status

Note: this is general guidance; seek specialist advice from an IR35 accountant or tax adviser for specific situations.
</task>

<output_format>
- Each point: one short paragraph
- Three status tests: a brief numbered list
- Three protective steps: bullet list
- Tone: clear and practical, not alarmist
</output_format>