If you suspect you’ll be receiving an In Scope IR35 determination when your End Client recommences IR35 preparations for the Private Sector roll out, is there anything you can do about it?
Take the time to review your determination
You’ll be given an official Status Determination Statement (SDS), which may be derived from HMRC’s online CEST tool (Check Employment Status for Tax). Where your End Client has determined you are inside IR35, it’s best practice for them to provide some detail on how they have come to this decision – if this isn’t provided it’s a good idea to request this so you can review the findings yourself.
Compare this SDS with any legal paperwork you have for the services you’ll provide, such as your service contract and any terms and conditions.
Can you submit your own SDS?
Whilst the CEST tool is available for contractors to complete their own assessment and various companies offer contractor IR35 assessments, it will be the responsibility of the End Client to make this determination – reviews you have undertaken independently cannot be used for your official SDS.
How can I challenge the determination?
If you feel the assessment does not fairly reflect your working practices and agreement you have in place with the End Client around how you deliver your services, then you can enter into a formal disagreement process.
The IR35 legislation gives contractors the opportunity to dispute their SDS if they feel it is inaccurate. Make a note of where your SDS varies from the legal documentation you hold for the assignment, and any agreed working practices – you’ll need to clearly demonstrate what aspects of the SDS you disagree with, and provide evidence where available to support your dispute. Once submitted the End Client will have 45 days to respond to your dispute and the existing determination will remain in place during that time. They’ll provide a summary of the outcome of their findings, and if it results in a change in your IR35 status then a new SDS will be provided to you.
Preparing for IR35
Ahead of your End Client making your SDS, it’s important that you understand the principles of IR35 and make any adjustments you feel necessary to ensure your working practices reflect that of an off-payroll worker.