IR35 Engagement Policy (UK only)

1. Purpose

To clarify the position and procedures VDC.cloud follows when engaging independent consultants and contractors under outside IR35 terms for UK-based projects.

2. Scope

This policy applies to:

• All UK-based independent contractors and personal service companies (PSCs) engaged by VDC.cloud
• Engagements that fall under the UK’s off-payroll working rules (IR35) within the public and private sector

3. IR35 Overview

Under HMRC guidelines, IR35 determines whether a contractor is genuinely self-employed ("outside IR35") or deemed an employee ("inside IR35") for tax purposes.

VDC.cloud follows the guidance as set out by:

• HMRC Employment Status Manual
• Off-Payroll Working Rules (April 2021 onwards)

4. Outside IR35 Engagement Principles

VDC.cloud considers engagements outside IR35 when the following conditions are met:

• Autonomy and control: The consultant determines how and when work is performed
• Substitution: The right to send a substitute with equivalent skills (subject to client approval)
• No mutuality of obligation: VDC.cloud is not obliged to offer continuous work, and the consultant is not obliged to accept it
• Project-based deliverables: The engagement is governed by a clearly defined Statement of Work (SOW) or milestone-based scope

5. Assessment and Documentation

• Each UK-based engagement is assessed using the HMRC CEST Tool or equivalent status determination framework
• A Status Determination Statement (SDS) is produced for each assignment and shared with the contractor
• The contractor must confirm their agreement with the SDS before the engagement begins

6. Contractor Obligations

Contractors operating outside IR35 must:

• Provide services via a registered company (PSC or limited company)
• Hold appropriate business insurance (e.g., professional indemnity)
• Issue invoices in line with the SOW or agreement
• Submit confirmation that they are responsible for their own tax and NIC liabilities

7. VDC.cloud Responsibilities

• Conduct due diligence and maintain documentation for all outside IR35 engagements
• Monitor IR35 legislation changes and update this policy as required
• Ensure fair and consistent treatment of contractors based on status determination outcomes

8. Disputes

If a contractor disagrees with their SDS:

• A formal challenge process is available, and VDC.cloud will respond within 45 days
• The SDS may be revised if new evidence supports a different outcome

9. Review

This policy will be reviewed annually or upon changes to HMRC guidance or case law affecting IR35 assessments.

10. Contact

For questions or support regarding IR35 compliance:

• VDC.cloud Professional Services Ltd (London, United Kingdom only)
• VDC.cloud Compliance Office

Submit a policy enquiry: Policy Enquiry

Website: https://vdc.cloud