Should Interim School Leaders Work Through Their Own Limited Company?

A practical guide for interim school leaders and the schools that engage them

This question comes from both directions. Experienced leaders moving into interim work want to know how to set themselves up. Proprietors want to know what it means for them if the person they’re appointing invoices through a company.

It’s an area where a lot of confident, contradictory advice circulates, much of it out of date. What follows is an outline of how the routes differ and what each side should be checking. It isn’t tax or legal advice, and both schools and interim leaders should take proper advice on their own circumstances rather than relying on a general article, including this one.

What are the three main routes?

A personal service company. The interim sets up a limited company and invoices through it. This is common in interim work generally and it offers flexibility, the ability to work for several clients, and a clear separation between the individual and their business. It also carries administrative obligations: accounts, corporation tax, insurance and the off-payroll working position.

Agency or umbrella PAYE. The interim is paid through a provider or umbrella company, with tax and national insurance deducted at source. Simpler administratively, with less flexibility and usually a lower net figure for the same day rate.

A fixed term contract of employment. The school employs the interim directly for a defined period. Less common for headship cover but occasionally the right answer, particularly for longer arrangements or where a school wants an employment relationship.

None of these is inherently right. What matters is that the route reflects the actual working arrangement rather than being chosen for convenience.

What is off-payroll working, in outline?

The off-payroll working rules, often called IR35, exist to determine whether someone working through an intermediary such as their own company is, in substance, working like an employee of the client.

Where the rules apply and the engagement is judged to be inside them, tax and national insurance are handled as they would be for an employee. Where the engagement is genuinely outside, the company is paid gross and handles its own tax.

Who makes the determination depends on the size and status of the client organisation. Small organisations are treated differently from medium and large ones, and public sector bodies have their own position. That means a maintained special school, an academy trust, a large independent school group and a small independent AP may each be in a different position for the same interim.

This is why we’d caution strongly against copying what another school did. Get your own position assessed and documented.

What determines status?

Broadly, whether the working arrangement looks like employment in substance.

The factors usually considered include the degree of control the client has over how, when and where the work is done, whether the individual must do the work personally or could send a substitute, whether there’s mutuality of obligation, whether the person is genuinely in business on their own account, and whether they’re integrated into the organisation.

Interim headship sits awkwardly against several of these, which is worth being honest about. A headteacher is necessarily integrated into a school, is present on set days, and cannot realistically send a substitute to lead a safeguarding meeting. Those are the arrangements that need careful assessment rather than a confident assumption either way.

What the contract says matters, and what actually happens matters more. A contract describing a genuinely independent arrangement while the working reality looks like employment won’t hold up.

What do schools need to know?

Four things, and none of them are affected by which route the interim uses.

Safer recruitment doesn’t change. A leader invoicing through a limited company still needs the full set of safer recruitment checks and still goes on the single central record. This is the point most often missed, usually because a limited company arrangement feels more like buying a service than appointing a person.

You need the status position settled. Before the start date, in writing, with the reasoning recorded. Getting this wrong is an avoidable cost that arrives later.

Insurance needs checking. Professional indemnity and public liability at a level appropriate to headship in your setting. Ask to see the certificate rather than accepting an assurance.

Data protection obligations still apply. An interim engaged through a company is processing your pupil and staff data. That needs covering in the agreement, and the school remains the data controller.

What should interim leaders consider?

Take proper accounting advice before setting up, rather than after your first placement.

Think about whether you genuinely want to run a business. A limited company means accounts, returns, insurance, chasing invoices and managing your own gaps between placements. Some experienced leaders love the independence. Others find the administration a poor trade for the flexibility and are happier on agency PAYE.

Get professional indemnity and public liability insurance at a level that reflects what you’re actually doing. Leading an independent special school carries more exposure than most consultancy, and the cheapest policy may not cover it.

Be honest in status assessments rather than optimistic. A determination that doesn’t match reality helps nobody, and the cost of it usually lands on you.

And keep your own records: DBS, training certificates, references, placement dates. Schools will ask, and being able to produce a complete file quickly is a genuine professional advantage.

From our experience

The most common problem isn’t the route chosen. It’s that nobody settled it before the start date.

We often see an arrangement drift into place, invoices being paid, and the status question addressed six months later when someone’s accountant raises it. By then the working pattern is established and the assessment is harder to make cleanly.

Many proprietors tell us they’d assumed a limited company arrangement meant the school had no obligations beyond paying the invoice. It’s an understandable assumption and it isn’t right, particularly on safer recruitment, where we regularly find an interim invoicing through a company and absent from the single central record entirely.

Schools that handle this well settle the status question, check the insurance, complete the checks and record all three before anyone starts.

A common misconception

“If they invoice through a limited company, they’re a supplier rather than a member of staff, so the school’s obligations are lighter.”

The commercial relationship is different. The safeguarding obligations are not.

Someone leading your school has unsupervised access to children, holds statutory responsibilities and makes decisions about pupil safety every day. How they’re paid changes none of that. The full checks apply, the single central record entry applies, and the safeguarding induction applies.

The children in your school are entitled to exactly the same assurance about the person leading them whether that person is on your payroll or sending you an invoice. Anyone suggesting otherwise has misunderstood what the checks are for.

Questions for proprietors and interim leaders

If you’re a school: have we settled and documented the status position? Have we seen the insurance certificate? Are the full safer recruitment checks complete and on the record? Does the agreement cover data protection?

If you’re an interim leader: have I taken proper accounting advice for my own circumstances? Is my insurance adequate for headship in this kind of setting? Does my contract reflect how I actually work? Can I produce my full compliance file on request?

Our perspective

There’s no universally right answer here, and anyone who tells you there is hasn’t looked at your circumstances.

What matters is that the route is chosen deliberately, assessed properly, documented before the start date, and reflects how the work is genuinely done. Take advice from someone who knows your position rather than following what another school or another consultant did.

And whichever route you use, the safeguarding obligations sit exactly where they always did. Get that part right and the rest is administration, which is much easier to sort out than a gap in the checks on the person running your school.