What Limited Company contractors need to know about the Status Determination Statement (SDS)

As a Limited Company contractor you’ve probably been ensuring that you’ve done everything you can to understand the changes to the IR35 reform, and what you needed to be doing. But can the same be said for your end hirer / client?

In this blog we explore the Status Determination Statement (SDS) and why you need one.

What is a Status Determination Statement (SDS)?

Your end hirer / client now must provide you with an SDS, which is a statement that shows which IR35 status determination they’ve awarded you. The statement is based on your contract and working practices, and will show you your status and their reasoning behind it. You must be provided with the SDS before you begin working on the contract.

What happens if you haven’t received one?

Ask your end hirer / client for one as soon as possible. Ideally they’ll provide you with one shortly after they’ve given you the contract. Since the IR35 reform it’s now 100% the responsibility of the end hirer / client to determine a contractor’s status, (and also bear the financial brunt of any miss-determined statuses) and to inform you of what your status is.

If you’ve been waiting a while for it, be sure to ask when you’ll receive it. If they need assistance you could share our free guide with them: IR35 FAQs for Agencies and End Hirers which highlights what the SDS is, and what they need to provide you with.

The importance of having your SDS

As your SDS determines your status, without one you won’t know how to best operate (Limited if you’re ‘outside’ IR35, and Umbrella if you’re ‘inside’ IR35) and therefore how to bring home as much of your contractor pay as possible. You’ll also need your SDS if you disagree with your status determination and wish to challenge it. If you find yourself in this position, our blog covers all the steps you’ll need to challenge your end-hirer / client.

How your Aardvark accountant can support you in a disagreement

Should you decide to challenge a client’s IR35 determination, your Aardvark accountant can help. They’ll provide you with a full contract and working practice review, and make helpful suggestions to both which could help your client revise your status determination. They’ll also be able to communicate directly with your end hirer / client to help demonstrate their suggested amends, and why they should reconsider your status.

How Aardvark Accounting can help

Our team of director-level accountants here at Aardvark know IR35 like the back of their hand, and provide their clients with unlimited advice, support and guidance on a daily basis. Our group company, SG Umbrella also provides our clients with free use of umbrella services should they need them, and are able to switch you back to our accounting services whenever your contract requires. You can find more information about our IR35 services here, or get in touch with us to discuss how we can help you.