There’s now just a few weeks until the 6th April implementation date when IR35 will be extended into the Private Sector. For End Clients, this means it’s crucial that they’re issuing accurate Status Determination Statements (SDS) to their contractors – sooner rather than later.
Key considerations for End Clients to make accurate IR35 Status Determination Statements
By now you should be familiar enough with IR35 to understand why the key considerations in the video below need to be reviewed before making an SDS. As you’ll know there’s a lot more to IR35 than just how the formal contract is worded.
Building a picture of off-payroll working
When it comes to making each SDS, there really is no one size fits all approach. Each contractor will need to be reviewed individually – with careful consideration as to whether their standard working practices resemble that off an off-payroll worker, or a directly engaged employee. If there are elements of how they operate that may be too similar to a direct employee, then you may need to consider whether you can make adjustments to how you operate.
HMRC will be looking at multiple factors should they wish to scrutinise your IR35 determinations, so you’ll need to be able to evidence that reasonable care has been taken when reviewing their working practices and terms of engagement.
There are a number of key factors you’ll need to understand to accurately complete tools such as HMRC’s Check Employment Status for Tax (CEST) online assessment form. How much supervision, direction and control will you maintain whilst the contractor works on your project? How much financial risk will the contractor incur? Will they be able to provide a substitute to deliver the work when they’re not able to attend site? How embedded are they within your organisation and processes?
If you’re looking for more information on the key factors of IR35, visit our blog archive here.
Understanding the End Client’s role in issuing the SDS
For many organisations engaging contractors off-payroll, there may be more than one party in the employment chain – so it’s important to understand who needs to be informed of the SDS to remain compliant.
We looked at passing down the SDS in a recent blog, found here.