An engagement is outside IR35 when, after applying the status tests, the contractor is genuinely in business on their own account rather than a disguised employee of the end client. The income can then be retained in the PSC and extracted as a tax-efficient mix of salary and dividends, and the contractor keeps the full range of allowable business expenses and pension planning.
Status is not a matter of what the contract says it is. It is decided by the multi-factorial case-law test covering control, substitution and mutuality of obligation, with the tribunal standing back to ask, on the whole picture, whether the hypothetical contract is one of employment. Genuine professional autonomy, a real right of substitution and being in business on your own account all point outside.
A CEST result, a contract review, or both can support an outside determination, but none of them is a guarantee on its own. HMRC and tribunals look at the actual working practices, so a clean contract paired with employee-like working practices will not hold. Under Chapter 10 it is the client, not the contractor, who issues the SDS that records an outside conclusion. See CEST for the limits of HMRC's status tool.