If you run an agency that uses contractors, you already know IR35 is not a theoretical risk. It is a real financial one. HMRC can land you with a tax bill for tens of thousands of pounds if they decide your contractors should have been treated as employees. And your accountant is your first line of defence against that.
But not all accountants understand IR35. Many general practice firms treat it as a side topic. They read a few HMRC guides and assume they know enough. For an agency founder, that assumption can be catastrophic.
So how do you actually vet an accountant's IR35 experience before you hire them? You need specific questions, not generic ones. You need to see evidence, not hear promises. And you need to know what a competent answer sounds like versus a confident but empty one.
This guide is for agency founders who want to choose an accountant for agency work who genuinely understands IR35, not just one who claims to. We'll cover the exact questions to ask, the documents to request, and the red flags that tell you to walk away.
Why IR35 Knowledge Matters More for Agencies Than Other Businesses
Agencies are structurally different from most businesses on IR35. You are not hiring one or two contractors. You are likely running a hybrid workforce of employees, freelancers, and limited company contractors on multiple client sites simultaneously.
Every contractor engagement is a potential IR35 investigation trigger. HMRC looks at agencies specifically because the contractor model is so embedded in how agencies operate. They know that agencies often blur the line between employee and contractor out of operational necessity.
Your accountant needs to understand not just the legislation, but how it applies to the specific dynamics of an agency. That means understanding retainer work versus project work. It means knowing how substitution clauses work in practice. It means being able to spot when a contractor relationship has drifted into employment territory without anyone realising it.
If your accountant cannot do that, you are running blind.
Question 1: "How Many Agency Clients Have You Advised on IR35 Status Determination Statements?"
This is your opening question. It is specific. It cannot be answered with a vague "we deal with IR35 regularly." You want a number and a context.
A good answer sounds like: "We have around 15 agency clients, and we've issued over 40 Status Determination Statements (SDS) in the last 12 months. We use a combination of the CEST tool and our own professional judgement, and we document every determination in writing."
A bad answer sounds like: "We handle IR35 for a few clients. It's something we're familiar with." That is not good enough. You need someone who has done this repeatedly, for agencies specifically, and who can show you the process they follow.
The SDS is the formal document that confirms whether a contractor is inside or outside IR35. If HMRC investigates, this document is your evidence that you made a reasonable determination. An accountant who has never written one cannot help you if HMRC comes knocking.
Question 2: "What Is Your Process for Reviewing a New Contractor Engagement?"
You want to hear a step-by-step process, not a general statement. A competent accountant should be able to walk you through their workflow without hesitation.
Look for answers that include:
- A review of the contract terms, not just the headline rate
- An assessment of the working practices, not just the written agreement
- A discussion about substitution, control, and mutuality of obligation
- A documented decision, signed off by someone senior
- A plan for periodic review, because contractor relationships change over time
If the accountant says "we use the CEST tool and that's usually enough," that is a red flag. The CEST tool is directional at best. HMRC themselves say it is not definitive. A good accountant uses it as one input, not the final answer.
If the accountant says "we send the contract to our IR35 specialist," ask who that specialist is and whether they have experience with agency contractors specifically. A tax specialist who works with construction companies may not understand the nuances of a creative agency engagement.
Question 3: "Can You Show Me an Example of a Status Determination Statement You Have Prepared?"
This is where you separate the practitioners from the theorists. Any accountant can talk about IR35. Far fewer can show you a real document they have produced.
Ask for a redacted example. They should be able to provide one with the client name and contractor details removed. Look at the level of detail. Does it reference specific clauses from the contract? Does it explain the reasoning behind each determination? Does it include a risk rating?
A good SDS is not a one-page tick-box exercise. It is a multi-page document that shows HMRC that you took reasonable care. If the accountant cannot produce one, or if the example they show you is thin, that tells you everything you need to know.
This is also a good test of their willingness to be transparent. An accountant who is reluctant to share examples may be hiding a lack of depth. An accountant who confidently shares a detailed, well-structured SDS is showing you their competence.
Question 4: "What Happens When HMRC Opens an IR35 Enquiry Against One of Your Clients?"
You want to hear a calm, specific answer. Not "it's never happened to us" (which may be true but tells you nothing) and not "we handle it" (which is too vague).
A good answer includes:
- The steps they take immediately upon receiving an enquiry letter
- How they gather evidence, including contracts, timesheets, and working practice records
- Whether they handle the correspondence directly or bring in a tax disputes specialist
- An estimate of how long a typical enquiry takes and what it costs
- A realistic assessment of the likely outcomes
If the accountant has never dealt with an HMRC enquiry, that is not necessarily a dealbreaker. But they should be honest about it and explain how they would handle one. If they brush it off with "we'd deal with it if it happens," that is not good enough.
You are not hiring an accountant for a perfect world. You are hiring them for the world where HMRC sends you a letter asking for three years of contractor records. You need someone who has been through that process before.