Agentic UK IR35 employment status determination letter, Status Determination Statement (SDS) drafting, and HMRC Check Employment Status for Tax (CEST) audit trail service for small businesses (1–50 staff) engaging contractors off-payroll under the Chapter 10 ITEPA 2003 rules. Replaces the employment tax adviser or solicitor who charges £500–£2,000 per contractor to produce a defensible SDS, document the reasonable care evidence, and respond to HMRC enquiry letters — a process where a flawed SDS exposes the end-client to the contractor's full PAYE and NIC liability.
Why now
No signals in today's batch; justified by HMRC's continued off-payroll enforcement activity and the National Insurance contribution rate increases in the April 2025 Budget (employer NIC up to 15%), which have dramatically increased the cost of getting IR35 wrong and pushed more SMEs to engage contractors rather than employees — increasing SDS volume.
Commercial value
HMRC estimates 180,000 medium and large businesses are in-scope for off-payroll rules; tens of thousands of smaller businesses engage contractors and produce SDSs informally. Employment tax advisers charge £500–£2,000 per contractor determination. A £149–£299 per-SDS agentic service or £299/mo unlimited SDS subscription is a clear saving. Budget line: 'IR35 compliance / employment tax advisory' is explicit. ACV for a 5-contractor SME: £750–£1,500/year.
Go-to-market
Target SME HR managers and finance directors via LinkedIn content on IR35 enforcement risk, and cold outreach to contractor accountants (who refer end-client SMEs). Price at £199 per SDS or £249/mo unlimited. First 10 customers from r/ContractorUK and LinkedIn posts on the NIC hike driving contractor-vs-employee decisions.
2-week MVP
Typeform intake: describe the contractor engagement (substitution rights, control, mutuality of obligation, financial risk). LLM maps answers to HMRC CEST factors, produces a structured SDS document with reasonable care evidence narrative, and flags high-risk factors. Delivered as a Word doc within 24 hours. Cut: HMRC CEST tool integration, appeals handling, multi-contractor bulk processing. Day-1 outcome: an SME finance director pays £149 and receives a legally structured SDS they can countersign and place on file — replacing a £600 adviser call.
Agent score
0.59 — Commercial score is solid — named budget line, clear fee displacement, high consequence of error — but capped at 0.78 because many SMEs use umbrella companies or payroll solutions that bundle SDS as a feature. Speed score is high: the MVP is a prompt-plus-form shippable in under 2 weeks with a known contractor community reachable via Reddit and LinkedIn at zero cost. Defensibility is weak; moat only builds through an audit-trail data asset and accountant referral network.
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