Confirmation of Arrangements letters were widely used during the original IR35 era, particularly before the off-payroll reforms shifted responsibility for status determination onto medium and large clients.
Many contractors obtained them alongside IR35 contract reviews as part of a wider evidence pack designed to support an outside IR35 position.
They still appear regularly today.
Some are useful, although others carry little value.
What is a Confirmation of Arrangements letter?
A Confirmation of Arrangements letter, often abbreviated as “CoA”, is typically a document signed by the client confirming certain aspects of the working relationship.
The letter is usually designed to support the contractor’s position that the engagement operates outside IR35.
Typical areas covered may include:
- control over the work
- lack of supervision
- substitution rights
- project-based delivery
- absence of employee benefits
- lack of mutuality of obligation
- financial risk
- operational independence
Some CoAs are very short, whereas others run for several pages and attempt to address multiple employment status tests in detail.
Why contractors started using CoAs heavily
Under the original Chapter 8 IR35 regime, the contractor’s intermediary — usually their personal service company (PSC) — was responsible for considering whether IR35 applied and accounting for any resulting tax and National Insurance liability.
That created strong demand for evidence which could support the PSC’s conclusion that an engagement fell outside IR35.
Contract reviews became commonplace, as did the production of Confirmation of Arrangements letters.
The logic behind this was fairly straightforward.
If a client confirmed that the contractor worked with significant autonomy, delivered project-based work, and operated independently of employees, that evidence could support the contractor’s position in the event of an HMRC dispute.
Many IR35 advisers and insurance providers encouraged contractors to obtain them where possible.
Why CoAs still matter after the off-payroll reforms
The off-payroll reforms changed who bears responsibility for determining status in many situations, but they did not remove the importance of evidence about the contractual relationship and how an engagement operates.
Status disputes still involve establishing the contractual terms and applying the employment status tests to the engagement.
Relevant evidence may include:
- how the contractor operates day to day
- how much control the client has a contractual right to exercise
- whether the contractor is genuinely independent
- whether the engagement has the characteristics of employment
A properly drafted CoA may still help support:
- outside IR35 status reviews
- evidence considered as part of a client’s status determination and reasonable-care process
- working practices assessments
- HMRC enquiries
- IR35 insurance applications
But the quality of the document matters enormously.
The problem with weak or generic CoAs
This is where many CoAs start to lose value.
Some are extremely generic.
Others use wording clearly copied from template libraries, with little connection to the actual engagement.
A weak Confirmation of Arrangements letter may damage credibility if it describes contractual rights or working arrangements that the parties have not genuinely agreed.
For example, problems may arise where:
- the letter claims the contractor has autonomy which is inconsistent with the rights actually agreed between the parties
- a purported substitution right is contradicted or substantially restricted by other contractual terms
- the engagement is described as project-based despite being ordinary BAU support
- the contractor is deeply integrated into internal management structures
- the client signs the document without genuinely understanding the wording
In an IR35 tax case, the contractual terms must first be established using ordinary principles of contractual interpretation. Evidence about the circumstances in which the agreement was made and how the engagement operated can be relevant to establishing those terms and applying the employment status tests, but genuine contractual provisions cannot simply be disregarded because they were not exercised in practice.
This distinction is particularly important following Atholl House. The Court of Appeal confirmed that the special approach adopted in employment-rights cases such as Autoclenz cannot simply be applied to an IR35 tax dispute to disregard contractual terms.
See also:
What a useful CoA normally contains
A useful Confirmation of Arrangements letter is usually grounded in the actual engagement rather than abstract legal wording.
That often means describing the agreed arrangements and real commercial circumstances in plain language.
For example:
- how the contractor receives work
- who controls scheduling and delivery
- whether project milestones exist
- what supervision occurs
- whether the contractor can refuse additional work
- how operationally separate the contractor remains from employees
The strongest CoAs are usually specific to the engagement itself. Short generic declarations often carry less value.
Timing matters
A contemporaneous CoA obtained during the engagement may carry greater evidential weight than a retrospective document created years later after an HMRC enquiry has already started.
That does not mean retrospective evidence is automatically worthless.
But evidence created at the time the work was being performed may be more persuasive, particularly where memories differ or working arrangements changed gradually over time.
The paperwork and working relationship must be consistent
A strong contract review, combined with a signed Confirmation of Arrangements letter, may still be undermined where other evidence conflicts with what the documents say about the engagement.
HMRC and tribunals will consider the relevant employment status factors, which may include:
- control
- personal service and substitution
- mutuality of obligation
- integration
- financial risk
- overall business reality
See also:
- IR35 employment status tests explained
- Control and IR35
- Mutuality of obligation
- Business on your own account
- Part and parcel and integration
The paperwork should accurately describe the contractual relationship and be consistent with the wider evidence surrounding the engagement.
If the documents describe a highly autonomous consultancy arrangement but other evidence points towards significant client control and integration into the client’s organisation, HMRC may challenge whether the engagement genuinely falls outside IR35.
How CoAs fit into the post-off-payroll landscape
Under the off-payroll rules, medium and large clients are now responsible for determining employment status, which has changed the role of Confirmation of Arrangements letters.
In some organisations, SDS processes and internal compliance systems replaced the older contractor-led evidence model.
Even so, evidence about the contractual and working arrangements still matters.
Some clients still use working practices questionnaires or confirmation documents internally when preparing Status Determination Statements.
Some advisers still recommend CoAs as part of wider evidence gathering, particularly where the engagement genuinely operates on an outside IR35 basis.
Others view them more cautiously because badly drafted or inaccurate documents may create additional problems if challenged later.
The practical reality
A realistic Confirmation of Arrangements letter may still help support an outside IR35 position, particularly when it accurately records the contractual arrangements and is consistent with the wider evidence surrounding the engagement.
But no document can determine status by itself.
Where the contractual relationship and other evidence point towards employment, a signed CoA may provide far less support for an outside IR35 position than contractors sometimes assume.