IR35 and off-payroll workers: how GPS time tracking supports outside-IR35 status

Your finance director has just opened the HMRC determination on a contractor who has been billing the company for eighteen months. The status determination is inside IR35. The PAYE liability is backdated. The contractor is shouting at you on a call from Bristol. Somewhere in this mess sits the question you should have asked when the contract was signed: who controls when, where and how the work gets done, and how do you prove it?

The three IR35 tests, in plain English

Since the off-payroll reforms in 2017 (public sector) and 2021 (medium-large private sector), the engaging company is responsible for the IR35 determination, not the contractor. HMRC and the courts use three tests carried over from Ready Mixed Concrete v Minister of Pensions (1968) and a long line of tribunal cases. The tests are mutuality of obligation, personal service (or right of substitution), and control.

Mutuality asks whether the engager is obliged to offer work and the worker is obliged to accept it. A contractor who can refuse the next project, and whom you can release without notice when the project ends, scores well on this. Personal service asks whether the contractor can send a qualified substitute. A genuine, unfettered right of substitution, exercised at least occasionally, is the strongest single indicator of outside-IR35 status.

Control is the test where GPS data cuts both ways. HMRC looks at who controls the what, the how, the when and the where. Light-touch direction (a deadline, a deliverable, a site to attend) is consistent with outside-IR35. Detailed supervision (start at 8am, log breaks, follow our method, sign off your finish time with the supervisor) is consistent with inside-IR35.

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How GPS tracking can push you the wrong way

If you make a contractor clock in and out of the same system as your employees, on the same geofence, with the same supervisor approval workflow, you have just handed HMRC a control signal. The contractor’s defence team will not enjoy explaining to the tribunal why the working arrangement looked operationally identical to employment.

Three patterns in particular tend to tip the determination. First, fixed start and finish times enforced by the platform. Second, supervisor approval of timesheets that goes beyond confirming the deliverable. Third, no real ability for a substitute to log in and complete the work without renegotiating the contract.

How GPS tracking can support outside-IR35 status when configured properly

The same tool, configured differently, becomes evidence in your favour. Capture entry to and exit from the client site, but not minute-by-minute movement. Let the contractor record their own time against deliverables, not against a fixed-hours rota. Allow a substitute to be enrolled by the contractor’s company, not by your HR, when the contract permits. Keep a clean separation between contractor records and employee records in the platform.

What you are building is a documentary trail that says: the contractor came on site to deliver agreed outputs, on dates they nominated within an agreed window, and signed off their own deliverables. That is the picture an outside-IR35 contract looks like in practice, and it is the picture HMRC reads back from the data.

Status Determination Statements and the audit conversation

Chapter 10 of ITEPA 2003 requires the engager to issue a Status Determination Statement to the contractor and their fee-payer, with reasons. You have to take reasonable care, which means you cannot blanket-determine all contractors as inside-IR35 to avoid risk (HMRC explicitly rejects that), and you cannot blanket-determine all as outside without case-by-case analysis.

When HMRC opens an enquiry, they ask for the SDS, the contract, the working practices and the evidence. The evidence is where most companies lose the argument. GPS clock-in data, exported per contractor, with the geofence definitions and the deliverable sign-offs, is evidence that can be produced in days, not months. GeoTapp keeps contractor activity in a separate, queryable view so the SDS, the contract and the operational reality all tell the same story.

Picture the next HMRC IR35 enquiry on a Tuesday afternoon, and SDS, contract and operational reality already line up.