Appealing an inside-IR35 determination: a practical guide

An inside-IR35 determination reduces a locum's take-home pay by thousands of pounds a year. If you disagree with one, the route is the client-led status disagreement process in section 61T of ITEPA 2003. It is worth being clear about what that is and is not: it is a right to make representations to the client, not an appeal to anyone else. Here is how it works and what to focus on.

Who can make representations

Anyone who received a status determination statement (SDS) from a medium or large end client placing them inside IR35. The fee-payer in the contractual chain (usually the agency or umbrella) can do the same.

The process

1. Receive the SDS. The end client must issue a written statement with the determination and the reasons. This is the trigger.
2. Make representations to the client. You can do this at any time before the last payment in the chain. There is no worker-side deadline and no standard form: a letter or email to the end client, saying you disagree and why, is enough. Do not let anyone tell you a 45-day window has closed on you.
3. The client then has 45 days to respond with reasons, and either confirm the determination or issue a changed one. The 45 days sit on the client, not on you. If the client does not respond inside 45 days, responsibility for the PAYE and NICs passes to it.
4. There is no appeal to HMRC or to a tribunal against the determination itself. CEST is a self-service tool you can run yourself, not a review anyone conducts for you. The route is representations to the client and, if you are paid through an agency, to the agency.

What to include in your letter

The three IR35 tests are control, mutuality of obligation, and personal service. Your letter should address each with specifics.

Control. Explain who decides how, where, and when the clinical work happens. Do you set your own days, bring your own equipment, use your own clinical judgement without supervision? Pull examples from the past three months, not theoretical claims.

Mutuality of obligation. Is the end client obliged to offer work, and are you obliged to accept? A genuine locum engagement has neither obligation beyond the current booking. Sessions booked one at a time, declined without consequence, paid per-session: all point away from mutuality.

Personal service. Does your contract permit you to send a competent substitute? Has this ever actually happened, even once? A written right of substitution that has never been used is weaker than one that has. If substitution is impractical in healthcare (as it often is for clinical work), address why the written right still makes commercial sense.

What to avoid

• Emotional arguments about fairness. The end client does not want to hear that IR35 is harsh. They want to hear which specific facts support your case.
• Broad quotes from blog posts. Specific contract clauses and actual working-reality evidence carry more weight.
• Contract-first arguments. HMRC and tribunals weigh the working reality above the written contract. If your contract says one thing but the reality is another, the reality wins.

If the end client maintains the inside-IR35 determination

You have options, in order of increasing formality:

• Request a meeting with the end client's procurement or status-determination team. Often the person who wrote the SDS used a generic template and will revise when presented with specifics.
• Commission a private contract review. A specialist IR35 firm will produce a detailed opinion for £250–£500. Present this to the end client.
• Run the contract through HMRC's CEST tool and save the result. CEST has its detractors but an "outside" result from CEST helps your case.
• Consult a tax solicitor if the sum at stake is material (typically £10,000+ per year in extra tax) and the client will not revise.

The commercial reality

Many NHS trusts issue blanket inside-IR35 determinations because the risk of a wrong outside-determination falls on them. This is the "blanket determination" that has been criticised since 2021. Challenge it by showing your engagement is not like a typical employed role. Some trusts have backed down on individual cases.

If the client does not change the determination

You have three options:

• Accept the determination and work inside IR35 for that engagement.
• Decline the engagement and seek work with a client where you are outside.
• Move to sole-trader status for that client (IR35 does not apply to sole traders, only to limited companies).

Keep records

Every SDS, every letter of representations, every response, every contract, every email about substitution rights: keep them. If HMRC investigates, the audit trail is what decides the case.

Sessional logs every booking with contract type and status determination. See our IR35 for locums guide for the underlying rules.

For information only, not regulated advice. Check with a qualified accountant or adviser.