14.01.2026
IR35 (the off-payroll working rules) changed the risk profile for organisations that rely on flexible talent. For many medium and large private-sector hirers, the client must determine a contractor’s employment status for tax and issue a Status Determination Statement (SDS), with the potential for tax, interest, and reputational exposure if the supply chain is wrong.
One of the most effective ways to reduce this exposure is to buy outcomes instead of hiring individuals. That’s where a Statement of Work (SoW), delivered as a contracted-out service, can be a pragmatic IR35 risk mitigator.
Morson Praxis sits within the wider Morson ecosystem as an applied technical consultancy, and can help organisations move from “resource augmentation” to “outcome delivery” through properly constructed SoWs backed by the track record and operational maturity of Morson’s projects capability.
Why SoW reduces IR35 exposure (when it’s genuine)
HMRC draws an important distinction: where an organisation receives contracted-out services from a third party (e.g., an outsourcing provider), the organisation receiving those services does not have to apply the off-payroll working rules the responsibility sits with the supplier providing the services. HMRC also warns clients to ensure the arrangement hasn’t simply been “relabelled” to avoid the rules.
That caveat matters. A SoW only helps if it is real i.e., it is truly a contract for services with defined deliverables, acceptance criteria, governance, and supplier accountability, rather than “time and materials with a different label”.
What “good” looks like: the SoW ingredients that matter for IR35
A defensible SoW model is designed around outputs and accountability. In practice, that means:
1) Clearly defined deliverables and acceptance criteria
SoWs translate “we need a contractor” into “we need these outcomes by these dates, to these standards.” This creates an auditable trail of delivery and sign-off rather than supervision of an individual.
2) Supplier ownership of delivery (not client supervision)
When the supplier is accountable for outcomes, quality, schedule, cost, remediation, working practices are less likely to resemble employment-like control.
3) Governance that supports “contracted-out services”
A robust SoW will include milestones, reporting, quality assurance, and change control. Done right, this strengthens the argument that you purchased a service, not labour.
4) Commercial structure aligned to outcomes
Fixed-price work packages or milestone-based fees push the relationship toward delivery accountability rather than “paying for time”.
Where Morson Praxis comes in
Morson Praxis can help you move to SoW-based delivery without breaking your operating model by combining consultancy discipline (scope, outcomes, governance) with delivery frameworks proven at scale in complex sectors. When you’re using SoW to reduce IR35 risk, credibility matters. A provider needs to demonstrate that SoW is not a new “IR35 workaround”, but a long-standing delivery model with real governance and outcomes.
SoW is the core operating model of Morson Praxis:
- 12,000+ projects delivered under SoWs (since 2000)
- £750m+ of project value delivered under SoW
- 40+ years constructing fixed-price work packages / delivering contracted services
- 1,200+ multi-discipline engineers and designers delivering a consultancy service
- 90+ clients supported across sectors
These kinds of figures matter because they signal repeatable governance. Morson Praxis is the difference between “we can write an SoW” and “we can operate an SoW model at scale, under audit, in high-compliance environments.”
Turning ambiguous demand into contracted outcomes
Many IR35 problems start upstream: stakeholders raise a requisition for a “role” because it’s the quickest route to capacity. Praxis helps reframe that request into a deliverable-based package:
- scope boundaries and deliverables
- acceptance criteria and evidence
- dependency mapping (what the client must provide vs what the supplier owns)
- governance and reporting cadence
- change control rules that prevent scope creep becoming “permanent role drift”
Embedding compliance into delivery, not paperwork
If your SoW is treated as a procurement artefact and then ignored operationally, risk comes back in through working practices. Praxis focuses on operational reality: how work is managed day-to-day, how outputs are accepted, and how accountability is evidenced.
A key advantage: shifting accountability away from the hirer (the right way)
Under our SoW model, Morson becomes the end client and is accountable for IR35 compliance and associated risks aligning with HMRC’s view that contracted-out services place responsibility with the provider (while still requiring that it’s a genuine contracted service).
For organisations that have struggled with blanket “inside IR35” decisions, inconsistent SDS processes, or hiring-manager-led determinations, that shift can reduce:
- internal admin burden and time-to-engage friction
- inconsistency risk across teams and sites
- exposure created by unmanaged working practices
- disputes and churn in specialist contractor populations
What outcomes you can expect (beyond IR35)
While IR35 risk reduction is often the catalyst, well-run SoW delivery also improves performance:
- clearer cost control (defined scope, milestones, and change control)
- quality assurance through acceptance criteria and auditable sign-off
- delivery ownership with a single point accountable for outcomes
- reduced dependency on individual availability (delivery can be staffed and managed by the provider)
Practical starting point: where SoW is most effective
SoW-based delivery tends to work best when the work is:
- project-based (defined start/end, measurable outcomes)
- packageable (distinct workstreams with acceptance gates)
- repeatable (similar deliverables across sites/regions)
- suited to a provider taking delivery management responsibility
And it’s typically not the right fit where you truly need day-to-day direction of an individual in a BAU role.
The bottom line on statement of work and IR35
If you want to mitigate IR35 risk without losing access to specialist capability, Morson Praxis can help you shift from “engaging people” to “buying outcomes” through properly governed Statements of Work aligned with HMRC’s contracted-out services principles. With decades of fixed price work package experience in highly regulated, complex sectors our approach is consistently proven to be operationally real, not a last-minute compliance veneer.
