A contractor’s IR35 status effectively determines their tax position with HMRC. It is assessed by the hirer completing an SDS on the contractor’s behalf.

From April 2021, if you are providing services through a Limited Company, you can’t avoid your end hirer assessing your IR35 status and providing you with a status determination statement.

No. The IR35 changes introduced in April 2021 oblige end hirers to take ‘reasonable care’ when assessing IR35 status. If reasonable care has not been taken when determining a contractors IR35 status, then the end hirer may incur fines with HMRC.

Yes. All contractors are entitled to challenge an end hirers IR35 determination. To do this, they need to undertake an independent review and put forward additional supporting evidence.

IR35 status assessments are required every time you engage with a new contract or make a change to your contract. But we recommend undertaking an independent IR35 status assessment through Brookson Legal if you disagree with your end hirers process and outcome.

IR35 legislation states that an end hirer must take ‘reasonable care’ in assessing all contracts, to establish whether the individual would be seen an employee when carrying out the necessary work. If they fail to take reasonable care, the end hirer will be responsible for calculating the deemed direct payment, paying it over and reporting the tax and NICs that result.

An SDS or status determination statement, is a document that summarises an end hirers IR35 assessment for a specific contractor. It determines whether they fall inside or outside IR35, and therefore how they will be paid and taxed.

From April 2021, Private Sector hirers are responsible for assessing a contractor’s IR35 status. This responsibility previously sat with the Contractor.

If you strongly disagree with your end hirers assessment of your IR35 status, one of our Business Advisory Team will request an IR35 review from the Brookson Legal team to help you challenge the decision.

From April 2021, it is the end hirers responsibility to assess IR35 status on behalf of you, the contractor. So even if you are a director of your own limited company, you no longer have that responsibility moving forward.