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Issuing a status determination statement (SDS)

As set out in the Off payroll working (IR35) ― public sector, large and medium clients ― overview guidance note, a client is required as part of the off-payroll working for large / public clients rules to issue a status determination statement (SDS) for all relevant contracts to indicate whether they are inside or outside the rules.

This is a complex requirement of the client given that assessing employment status is a complex area of tax based entirely on case law. See the Establishing employment status, Off-payroll (IR35) ― the notional contract and Implementing off-payroll working (IR35) for large/public clients guidance notes for more on the technical aspects of employment status and making that assessment. This covers some of the processes that can be put in place in order to make the assessment as low risk as possible.

Even when there are robust policies and processes in place, difficulties are likely to arise and HMRC may