IR35 / Off-Payroll Working Compliance Statement

RD1 supports clients and contractors in meeting their obligations under the off-payroll working rules (Chapter 10, Income Tax (Earnings and Pensions) Act 2003, as amended by the Finance Act 2017 and Finance Act 2020), commonly known as IR35.

Since April 2021, medium and large private-sector clients (and all public-sector clients) are responsible for determining the employment status of contractors they engage through personal service companies, and for issuing a Status Determination Statement (SDS). Where RD1 is the fee-payer in the labour supply chain, we apply the client's SDS and operate PAYE and National Insurance accordingly where a role is determined to be inside IR35.

RD1 requests the client's SDS before an off-payroll contractor assignment begins, ensures payments are processed correctly according to that determination, and provides the SDS to the contractor as required by law. Where a client is a “small company” as defined by the Companies Act 2006 and therefore outside the scope of the client-led rules, RD1 will confirm this and clarify who carries responsibility for the status determination.

Contractors who disagree with a status determination should raise this with the end client via the client-led status disagreement process required under the legislation; RD1 will support this process where we are part of the supply chain.

RD1 carries out reasonable due diligence on any umbrella companies or intermediaries used in placing contractors, consistent with HMRC's guidance on avoiding non-compliant umbrella arrangements and tax avoidance schemes.

Questions about a specific assignment's IR35 status should be directed to RD1 via accounts@rd1.co.uk.