The Status Determination Statement (SDS): What it is, who writes it and when you should receive one

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What is the Status Determination Statement?

A Status Determination Statement (or SDS) is a document or email that states the outcome of an IR35 status assessment - either inside or outside IR35 - and the reasons for that outcome.

It should be produced by your client and provided to you before an engagement begins. Your client will also need to supply the SDS down the supply chain, so that the fee-payer (whoever is paying you) is also aware of the status determination.

The client must take ‘reasonable care’ when making the determination. This means, according to HMRC, that the client “should act in a way that would be expected of a prudent and reasonable person in the client’s position.” This is important because if the client fails to take reasonable care, they become liable for any unpaid taxes should HMRC later deem this to be the case.

Who is responsible for the SDS?

Clients are responsible for issuing the SDS. They are legally required to issue the SDS if they are a medium or large-sized business and therefore subject to the off payroll working rules (IR35) when engaging contractors through an intermediary.

Clients will be considered a medium or large-sized business if they meet at least two the following criteria for two consecutive financial years:

  • Turnover of more than £10.2 million
  • A balance sheet total (assets) of more than £5.1 million
  • An average of more than 50 employees

When should you receive one?

Following an IR35 assessment of the engagement, you should be issued with the SDS by your client. Unfortunately, IPSE has heard of instances where the SDS is not always reaching the contractor.

In fact, IPSE research in 2023 revealed that as many as three in five contractors (60%) were not provided with a SDS. This is especially concerning given that just 12 per cent of respondents to this question were subject to the small business or wholly overseas IR35 exemption.

In this instance, it’s worth reminding your client - and if necessary all the parties in the supply chain - that they are legally required to provide you with the SDS, as it is should be passed down to each party in the supply chain until it reaches the fee-payer.

At this point, the fee-payer should also issue you with the SDS, or alternatively, you can always request to see a copy from the fee-payer.

Who is the fee-payer?

The fee-payer is the party paying the contractor in the supply chain. It is the entity that sits directly above the contractor in the supply chain and is responsible for deducting employers national insurance and the apprenticeship levy.

If you then disagree with the IR35 determination, you can then challenge it. For more information, we recently wrote about how you would go about challenging this.


Need more help? Self-employment often means having to navigate lots of different websites with no clear source of truth. As the only not-for profit focused on self-employment, IPSE provides impartial and relevant advice on the topics that matter to you.

IPSE Advice

IR35 Hub

For 20 years, IPSE has been not only campaigning against IR35, but also advising contractors and the self-employed on how to navigate it. Learn more about IR35 and how it may affect you by visiting our IR35 Hub.


Meet the author

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Joshua Toovey

Senior Research and Policy Officer