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This is general guidance, not legal or tax advice. IR35 disputes are fact-specific and the financial exposure can be significant. Seek specialist tax advice or legal representation before taking formal action against a determination. Read our full disclaimer.
Why IR35 disputes happen
IR35 status disputes typically arise in two ways. First, a medium or large media client may issue a Status Determination Statement (SDS) under the off-payroll working rules that the freelance journalist believes is wrong — often a blanket “inside IR35” determination applied across many contractors without regard to the specific facts of each engagement. Second, HMRC may open a compliance check into a personal service company's (PSC's) historical tax position and conclude that past engagements should have been treated as inside IR35.
Both routes have a formal challenge process. Understanding which stage you are at — client disagreement, HMRC compliance check, statutory review, or Tribunal — determines what evidence you need and how quickly you need to act, since several of these stages carry strict time limits.
Step one: the client status disagreement process
Under Chapter 10 of ITEPA 2003, a medium or large client issuing an SDS must operate a status disagreement process, allowing you (or the fee-payer) to challenge the determination. You should set out clearly why you believe the engagement is outside IR35, referencing the specific working practices — the actual level of control exercised, whether there is a genuine right of substitution, and whether there is mutuality of obligation between commissions.
The client has 45 days to respond with either a revised determination or reasons for maintaining the original one. If they fail to respond within that window, responsibility for the status decision — and any resulting liability if it later proves wrong — shifts from the fee-payer to the client. This deadline is a meaningful piece of leverage and should be tracked carefully.
Appealing a formal HMRC determination
Written appeal within 30 days
If HMRC issues a formal decision, assessment, or determination — typically following a compliance check into your PSC's tax affairs — you generally have 30 days from the date of the decision to appeal in writing, setting out clearly why you disagree and on what grounds.
Statutory review
HMRC may offer an internal statutory review, carried out by an officer who was not involved in the original decision. This is a genuine opportunity to have the decision reconsidered before matters escalate further, and can resolve disputes without needing to go to Tribunal.
Alternative Dispute Resolution (ADR)
In some cases HMRC will consider ADR, using an independent, HMRC-trained mediator to help both sides reach agreement outside formal litigation. It does not replace your right to a statutory review or Tribunal appeal but can be a useful, lower-cost step where there is a realistic prospect of agreement.
The First-Tier Tribunal (Tax Chamber)
- 1When a case reaches the Tribunal: If a statutory review does not resolve the dispute, or you decide to bypass it, you can appeal directly to the First-Tier Tribunal (Tax Chamber), the independent judicial body that hears tax appeals, including IR35 status cases.
- 2What the Tribunal examines: The Tribunal looks at the substance of the actual working relationship — not just the contract wording — considering control, mutuality of obligation, substitution, financial risk, integration into the client's organisation, and other factors drawn from established employment-status case law.
- 3Evidence and representation: Cases typically involve documentary evidence (contracts, correspondence, invoices, diaries showing how work was actually allocated and controlled) and witness evidence describing day-to-day working practices. Given the complexity, specialist tax representation is strongly advisable at this stage.
Settlement negotiation with HMRC
HMRC's Litigation and Settlement Strategy allows negotiated settlements in appropriate cases, and a significant proportion of IR35 disputes are resolved this way rather than through a full contested Tribunal hearing. A negotiated settlement can reduce legal costs, shorten the time to resolution, and provide certainty, but it may still involve paying a material sum in back tax, National Insurance, and interest.
Never agree a settlement figure with HMRC without independent specialist tax advice on whether it fairly reflects your actual liability under the case-by-case IR35 tests.
Why IR35 cases are decided one at a time, not by checklist
There is no single decisive factor in an IR35 status dispute. HMRC and the Tribunals look at the whole picture of the working relationship as it actually operated, not merely at what the contract says. A written substitution clause that both parties know would never genuinely be exercised carries little weight; a verbal understanding that closely tracked employment-style control can outweigh contractual language suggesting independence.
This case-by-case approach cuts both ways for journalists: a blanket “inside IR35” determination applied to every freelancer at a client is vulnerable to challenge precisely because it ignores individual facts, but equally, a freelancer cannot rely solely on a well-drafted contract if their actual working practices look like employment in substance.