For assignments taking place after 6 April 2021, responsibility for determining IR35 status generally sits with the end client (hirer), where the contractor is operating via a Personal Services Company (PSC) (unless the client is exempt).
Client responsibility
For each assignment, the client must:
Determine whether the role is inside or outside IR35
Take reasonable care when making that determination
Provide a Status Determination Statement (SDS)
The Status Determination Statement (SDS) includes both the outcome and the reasoning behind the decision. Contractors will be able to view and download the SDS before accepting the booking.
IR35 assessment outcomes
Outside IR35
The assignment is considered genuinely independent. The contractor submits timesheets and invoices via the platform, and we will pay the PSC without tax deductions, in line with agreed payment terms.
Inside IR35
The assignment is considered employment for tax purposes. As the fee payer, we will:
Deduct Income Tax and employee National Insurance
Account for employer National Insurance
Pay the remaining amount to the contractor’s PSC business bank account
Disputes and challenges
If a contractor disagrees with the IR35 determination, they can raise a dispute. The client is required to review this and respond with a reasoned decision.
Client exemption (small companies)
If the end client qualifies as a small company, the responsibility for determining IR35 status remains with the contractor. In these cases, contractors are responsible for assessing their own IR35 status and managing their tax obligations accordingly.
Compliance and liability
All parties must meet their obligations under the legislation. If the client does not take reasonable care in making the determination, or if required processes are not followed, liability may transfer within the supply chain.