IR35 for hirers and UK businesses

What evidence do businesses need to prove IR35 status?

Robust status determinations and comprehensive contracts are a must. Additional evidence that has been used to reach the conclusions in their status determination statements should be retained.

More detail

To prove IR35's status as a business, you must gather and retain evidence demonstrating the nature of the working relationship between the contractor and the end client.

Based on binding law from the Court of Appeal, the starting point is the contract. A comprehensive agreement that fully details the terms of the relationship is essential. Ensure the contract is drafted objectively and that there are no contractual holes. Ensure the contract covers the main status factors and fully describes the services delivered.

The status determination is best documented using a Status Determination Statement (SDS), as defined in the legislation. This must include the status conclusion and reasons for the conclusion. It is prudent to fully incorporate a list of any questions and answers used during the multi-factorial analysis and any relevant evidence.

Finally, it is strongly recommended to get all parties to sign the SDS and confirm that the information contained reflects the arrangement.

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