For both public sector contractors and private sector contractors providing services to medium-large organisations, your end client is responsible for determining your status. They are likely to be using HMRC’s CEST tool, or independent services such as Qdos’ Status Review.
Some end clients have been known to apply blanket determinations whereby they are simply placing all of their PSC contractors inside IR35 to avoid administration and liability concerns associated with the rules – this is not compliant with the legislation. Others are placing contractors based on their role (e.g. determining all nurses as inside IR35) which HMRC have deemed appropriate, however is fraught with issues when it comes to compliance with the legislation.
For private sector contractors working for small end clients, you remain responsible for your status. To determine your status, you should have your written contract reviewed for IR35 compliance and conduct an assessment of your working practices.
The way in which you actually provide the services is crucial, and whilst HMRC usually begin an enquiry by looking at the contractual terms, they will seek to clarify the terms directly with the end client. If your contract does not reflect reality, any positive elements of the agreement would have very little bearing in an IR35 enquiry. You should therefore always consider a review of your working practices when determining your status.
Despite changes in the administration of IR35, the tests used to determine status remain the same. Click the link below to learn more about these in the compliance guide.