Reasonable care is the standard a medium or large end client must meet when reaching the conclusion in a Status Determination Statement (SDS) under Chapter 10. The client must genuinely assess the individual engagement and form a properly reasoned view, rather than applying a label without thought.
The consequence of failing to take reasonable care is significant: the SDS is invalid, and the client itself becomes the deemed employer liable for the PAYE and NIC, even where there is an agency or fee-payer below it in the chain. Reasonable care is therefore not a box-ticking formality; it is the gateway to the client passing the tax liability down the chain.
The clearest example of a failure of reasonable care is a blanket determination: a client applying "inside IR35" to a whole category of contractors without assessing each engagement individually. The firm's stance is that blanket determinations are bad practice and legally risky for the client, and a contractor faced with one can use the client-led disagreement process to seek an individual assessment. The statutory hook is ITEPA 2003 s.61NA, with HMRC guidance at ESM10014.