IR35 and Compliance
What is an SDS?
An SDS, or Status Determination Statement, is a document recording the outcome of an IR35 status test. The SDS is an essential document as it provides evidence of the IR35 status of the contractor. It should include detail around the determination conclusion along with reasons for the conclusion.
More detail
A Status Determination Statement (SDS) is issued by the engager, the party that hires the contractor.
The SDS should explain why they have determined that the contractor has (or has not) been considered an employee for IR35.
To shore up the determination and reduce the risk of expensive, protracted litigation with HMRC, ensuring the SDS is fully comprehensive and contains all reasons and key data considered for the decision is prudent. A further level of protection can be created by having both parties sign off the document as a true reflection of the arrangements.
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