IR35 Status Determination Letter Generator

An IR35 Status Determination Statement (SDS) is a formal document that sets out whether a contractor engagement falls inside or outside the off-payroll working rules (IR35). Since April 2021, medium and large private sector clients must issue an SDS before engaging a contractor through a Personal Service Company (PSC).

For medium and large private sector clients, the end client must determine IR35 status and issue a Status Determination Statement. For small private sector clients, the contractor's PSC remains responsible for making the determination. Public sector clients have been responsible since April 2017.

The Ready Mixed Concrete test comes from the 1968 case Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance. It established three conditions for a contract of service: the worker agrees to provide their own work and skill; the employer has a sufficient degree of control; and the other provisions are consistent with employment.

Key factors include: control (who decides how, when and where work is done), substitution (can you send someone else), mutuality of obligation (must work be offered and accepted), financial risk (do you bear the risk of loss), provision of equipment, part and parcel of the organisation, and the right to refuse work.

If HMRC determines that IR35 should have applied and didn't, the fee-payer (usually the agency or client) becomes liable for the unpaid tax and National Insurance. Penalties of up to 100% of the tax due can apply, plus interest. Contractors may also face retrospective tax assessments going back several years.

Yes. If you disagree with a client's Status Determination Statement, you have the right to make representations. The client must respond within 45 days. If you remain unsatisfied, you can escalate to the client's dispute resolution process or ultimately to a tax tribunal.

No. CEST (Check Employment Status for Tax) is HMRC's free online tool. An IR35 status determination letter is a more detailed document that considers all relevant factors, references case law, and provides written reasoning. Many tax advisors recommend having a professional determination alongside CEST.

IR35 status should be reviewed whenever the working arrangements change, when a contract is renewed or extended, or at least annually. A change in role, reporting line, or working location can affect the determination. Each engagement must be assessed individually.

No. A substitution clause alone is not sufficient. HMRC and tribunals look at whether the right of substitution is genuine and has been, or realistically could be, exercised. A clause that exists on paper but would never be used in practice carries little weight.

They are effectively the same rules. IR35 is the informal name for the Intermediaries Legislation introduced in 2000. The off-payroll working rules refer to the 2017 and 2021 reforms that shifted responsibility for determining status from the contractor's PSC to the end client (public sector from 2017, medium/large private sector from 2021).