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, you have a statutory right to appeal under the Chapter 10 off-payroll working rules. Here is how the process works and what to focus on.

Who can appeal

Anyone who received a status determination statement (SDS) from a medium or large end client placing them inside IR35. The right to appeal also extends to the fee-payer (usually the agency or umbrella in the contractual chain). You must be currently engaged or have been recently.

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. Submit a written disagreement within 45 days of receiving the SDS. There is no standard form, a letter or email addressed to the end client.
3. The end client must respond within 45 days of receiving your disagreement with either a revised SDS or a written explanation of why they maintain the original.
4. If unresolved, you have further routes: an HMRC CEST (Check Employment Status for Tax) review, a private contract review from an IR35 specialist, or ultimately a tax tribunal, though very few cases go that far.

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 appeal fails

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 appeal letter, 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.