What evidence do businesses need to prove IR35 status?

To prove IR35 status, gather and retain evidence which demonstrates 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.

An IR35 status is best documented using a Status Determination Statement (SDS), as defined in the legislation. This must include the IR35 status and reasons for the determination. It is prudent to fully incorporate a list of any questions and answers used during the multi-factorial analysis, alongside 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.