What an IR35 Contract Review Actually Checks and Why It Matters

What a Contract Review Checks for IR35 Purposes

If you operate through a limited company, understanding what a contract review actually examines can save you from a costly HMRC inquiry. A thorough IR35 contract review looks beyond the written words on the page to assess whether your engagement genuinely reflects the working relationship of a contractor rather than a disguised employee.

This post walks through the key areas a reviewer typically examines, why working practices matter as much as the written contract, and what you can expect at the end of the process.

Why IR35 Status Depends on More Than the Written Contract

HMRC's off-payroll working rules apply where a worker provides services through their own intermediary and would be an employee if providing those services directly to the client. Where those rules apply, HMRC says the worker should pay broadly the same Income Tax and National Insurance contributions as an employee would.

That definition matters because it anchors the status question in employment law concepts, not simply in what your contract says. A contract can contain all the right clauses, but if the day-to-day reality looks like employment, HMRC may disregard the written terms. For that reason, reputable review providers assess both the written agreement and the actual working practices.

The Written Contract

A contract review for IR35 purposes starts with the written terms between your intermediary (typically your limited company) and either the end client or the agency in the supply chain. Providers such as Qdos and Bauer and Cottrell commonly examine whether the written contract supports the following:

• Substitution -- does the contract give your company a genuine right to send a suitably qualified substitute in your place, without requiring the client's approval on personal grounds?
• Control -- does the contract leave the manner, method, and scheduling of work to your company rather than dictating how, when, and where you work?
• Mutuality of obligation -- are there provisions that suggest the client must offer ongoing work and you must accept it, which could point towards employment?
• Financial risk -- does the contract place commercial risk on your company, for example through indemnity clauses, liability for defective work, or requirements to carry your own professional indemnity insurance?
• Other indicators -- length of engagement, exclusivity obligations, equipment provisions, and the right to profit from how efficiently you carry out the work.

Reviewers also look at schedules, policies incorporated by reference, and any opt-out agreements, because these can affect the overall picture of the engagement.

Working Practices

A written contract that looks contractor-friendly is only part of the status picture. Many review providers, including Fusion Accountants and Qdos's contract review service, also assess the actual working practices to check whether they are consistent with what the contract says.

Typical questions at this stage include:

• Has a substitute ever been used in practice, or is the right to substitute purely theoretical?
• Does a manager from the client organisation direct your day-to-day tasks, hours, and priorities?
• Do you use the client's equipment, work exclusively on their premises, or attend as though you were a member of their staff?
• Are you integrated into the client's team in ways that go beyond the delivery of a specific project or outcome?

These questions reflect the employment status tests developed through case law. Following the Supreme Court's decision in PGMOL v HMRC, substitution and the degree of control exercised by the client are central to any status assessment.

What HMRC May Look At

It is worth knowing that if HMRC opens a compliance check, it can request contracts, agreements, and other documentation to assess whether the off-payroll working rules apply. According to IR35 Shield's guidance on compliance checks, HMRC will examine the overall arrangement rather than simply accepting written terms at face value. Having a prior contract review and a documented understanding of your working practices puts you in a stronger position if that happens.

What a Review Produces

At the end of a commercial contract review, the provider typically delivers:

• An opinion on the status indicators present in the written contract and, where assessed, the working practices.
• A list of suggested amendments to strengthen any weak clauses.
• Compliance points for you to raise with the agency or client.

These reviews are commercial services, not HMRC determinations. Only the end client can issue a Status Determination Statement (SDS), which is a legal requirement under the off-payroll working rules. A contract review can inform and support that process, but it does not replace it.

Choosing a Review Provider

When selecting a provider, look for specialists with a track record in employment status case law. Some providers offer insurance alongside their reviews, which can help protect against the cost of a successful HMRC challenge. Check whether the review covers working practices as well as the written contract, and whether it produces clear, actionable recommendations.

HMRC's guidance on understanding off-payroll working was last updated on 26 February 2026, so ensure any review you commission draws on current guidance.

This platform does not determine, verify, or warrant IR35 status; the SDS is the client's legal responsibility. Contractors should take their own advice and consider IR35 insurance.