​IR35 Survival Kit

Under the new off-payroll working rules to take effect from 6th April 2021, medium-large end clients will take on the responsibility of determining the IR35 status of their contractors. The fee-payer in each engagement will then be responsible for deducting the relevant tax and National Insurance at source. Depending on the structure of the contractual chain, this responsibility usually sits with either the end client or the recruitment agency in the engagement.

What you can do:

Open up a Dialogue with Your Agency/End-Client – Understanding their intentions is the first step. Your tax status won’t be your decision anymore, so speaking with your end user/agency is the best way of determining what will happen and how.

Encourage Your End-Client/Agency to Speak with Qdos –Whilst it may no longer be your responsibility to assess your status, you can still encourage fair and compliant assessments from your client. We have worked with over 2,200 clients and agencies with this process so far, providing training, consultancy and fair assessment processes.

Check Your Status – Whilst we don’t recommend using the CEST tool in general, it is likely to be the first port of call for many end clients. Using this tool will give you a heads up of what your result may be (remember that you might have differing opinions on how some of the questions are answered). For the same reasons, you may prefer to have a independent IR35 contract review completed. Doing so will ensure a higher level of accuracy and provide you with evidence should you require.

A ‘Status Determination Statement’ (SDS) is a document that states the IR35 status of a certain engagement based upon the results of an IR35 assessment including the IR35 status result and the reasoning for the conclusion.

It will be the end client’s responsibility to produce an SDS under the off-payroll rules following their assessment of your status. The SDS must also be shared directly with the contractor.

If, after receipt of the SDS, any party of the contractual chain disagrees with the outcome, they have the right to appeal. This includes you as a contractor.

This is a client-led process and so you should refer to your client for how to dispute your result. However this will usually be in writing and should include detailed reasoning as to your objection.

The end client who issued the SDS must respond to your dispute within 45 days. Failure to do so may result in the end client becoming liable in the event of compliance activity.

If you do choose to appeal the SDS outcome and after reviewing the appeal, your end client decides that the original SDS still stands then they must provide you with their reasoning for such an outcome.

If, however, the initial SDS is proven to be incorrect, then your end client must provide a new SDS. This new SDS must also take into account the changed result.