Since April 2021, medium and large companies in the UK must assess the employment status of contractors working via personal service companies (PSCs) and provide a written Status Determination Statement (SDS). The SDS must give reasoned conclusions using the HMRC Check Employment Status for Tax (CEST) tool or equivalent assessment.

• Required from all medium and large businesses (2+ of: turnover >£10.2M, assets >£5.1M, employees >50)
• Small businesses: contractor self-determines status (old rules)
• Inside IR35: employer must deduct tax/NI at source (or use PAYE umbrella)
• Outside IR35: contractor invoices gross; manages own tax
• Contractor has right to appeal the determination — must be resolved within 45 days

Legal reference: Income Tax (Earnings and Pensions) Act 2003 Chapters 8&10; HMRC CEST; Finance Act 2020