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Collecting "Minor" IR35 Pointers

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    Collecting "Minor" IR35 Pointers

    OK, so IR35 is based on RoS, D&C and MOO.

    Is there really any point in collecting "minor" pointers outside of these (e.g. different coloured badge, or not being allowed in the staff sauna?) I've usually kept a list of what differentiates me from the permies but if it's nothing to do with the 3 legislative tenets of IR35 am I just wasting my time? Would a tribunal even look at these? (And if so is there any precedent of them making any difference?)

    I know it's not a big deal to keep such a list but I'm against spending time on completely futile chores.

    #2
    No, it is not a waste of time. It will allow you to build a complete picture of your working practices, which are critical to convincing (HMRC and) a tribunal (but mainly the latter ). The more evidence you have, trivial or otherwise, the better, although it's obviously important that the core factors of RoS/MoO/D&C are addressed too.

    Comment


      #3
      It's always useful. Could influence the case in your favour. Just on that chance alone it's worth doing. Don't do it and it's possible it could influence it the other way so actually creating a larger gap.

      We won't know in many cases because they will get thrown out or settled before it hits the public eye as QDOS indicated but if I get notice of intention of HMRC to have a go at me about IR35 I'll hope I've got the biggest stack of defense they've seen which might just send them packing early doors. For a few minutes here and there then that's time well spent in my book.

      One of the other main factors mention in many cases is the 'part and parcel' test. All these bits and pieces could be pretty key to proving it. You getting different passes, working different times, different methods of advising you won't be available etc.

      Here is a good example. Borderline win for contractor.

      'Borderline' win for IT contractor in IR35 appeal :: Contractor UK

      Some key comments that your evidence can help with are things like..

      "did not present an image of a businessman offering his services to the marketplace,"
      Treating your client like a client (one of my faves), passes and attitude on site could help here.
      not having to provide or fund any IT equipment, just like Avecia's own staff wouldn't,
      Don't have to but using your own mobile might have tipped this.

      Continuing HMRC's case, Hall said the contractor's billings were "broadly equivalent" to the hours of Avecia employees, and his holiday time was scarce.

      However, Brajkovic enjoyed more flexibility in his hours than employees, Avecia said, and he claimed he bore training costs, for being excluded from a staff training scheme.
      Not clockwatching like a permie, not using the staff sauna, having a different badge etc may have all contributed here.

      The closest the Revenue official seemingly came to swaying Tribunal Judge Peter Kempster was when he argued that Brajkovic became "embedded" into Avecia.

      Not only did the contractor report to Avecia managers daily and weekly, but in doing so he also became "part of the Avecia IT project team structure for over four years."
      Interesting one as I also believe after 4 years you are approaching a dangerous time, I think the 6 years and only gig that a poster explained the other day is a fail but anyway, continuing to collect this evidence, making sure they always give you the contractor pass etc are all ways to prove you are not part and parcel etc.

      So I strongly believe all that evidence you can't be arsed collecting is very important, particularly in a long gig.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Slightly different question; putting the 'minors' to one side, are there any 'majors' which would immediately blow any investigation out of the water?

        For example: In my last contract I sub contracted a 3rd party to undertake some of the work, all invoiced and managed through my Ltd company. Surely this is a definitive sign of B2B, as there is no possible way an employee could have done it.

        Comment


          #5
          Originally posted by Whoknows View Post
          Slightly different question; putting the 'minors' to one side, are there any 'majors' which would immediately blow any investigation out of the water?

          For example: In my last contract I sub contracted a 3rd party to undertake some of the work, all invoiced and managed through my Ltd company. Surely this is a definitive sign of B2B, as there is no possible way an employee could have done it.
          In case law the "majors" are substitution, mutuality of obligation and supervision/direction/control. Any one of those three gets you out of IR35. As far as I'm aware, the scenario you suggest has not been tested. If it was to be a silver bullet we'd all be subbing work mutually via our buddies. On it's own it would tend to suggest a B2B arrangement, but the three factors above are what count in court.
          Public Service Posting by the BBC - Bloggs Bulls**t Corp.
          Officially CUK certified - Thick as f**k.

          Comment


            #6
            Originally posted by Whoknows View Post
            Slightly different question; putting the 'minors' to one side, are there any 'majors' which would immediately blow any investigation out of the water?

            For example: In my last contract I sub contracted a 3rd party to undertake some of the work, all invoiced and managed through my Ltd company. Surely this is a definitive sign of B2B, as there is no possible way an employee could have done it.
            Reading up on the basics of IR35 should answer this. Most articles make that clear. I'd suggest trying some articles on the right now so some googling.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Originally posted by Fred Bloggs View Post
              In case law the "majors" are substitution, mutuality of obligation and supervision/direction/control. Any one of those three gets you out of IR35. As far as I'm aware, the scenario you suggest has not been tested. If it was to be a silver bullet we'd all be subbing work mutually via our buddies. On it's own it would tend to suggest a B2B arrangement, but the three factors above are what count in court.
              I would suggest any actual substitution is a silver bullet. In fact one of the expert companies told me this using those exact words.

              Even HMRC's defunct BETs had it down as a top point scorer, si I suggest the reason it's never been tested is that hmrc don't feel it's worth it.

              Whether or not your client would allow it is a different matter. That's what really says whether your contract is a sham or not.

              Comment


                #8
                While the big three are ROS, control and MOO collecting other minor evidence is certainly not a waste of time. We would suggest collecting any and all evidence that demonstrates genuine self employment as this would all form part of a defence case in the event of an enquiry. Normally in the initial letter from HMRC at the start of an IR35 enquiry they will ask if the contractor has considered IR35 and if they have and believe they are outside of IR35 the reasons behind this. The more that can be mentioned and evidenced the better.

                IR35 is not a clear cut piece of legislation and in an enquiry if one aspect of a defence case is weak, providing evidence of other albeit minor points may tip the scales in favour of the contractor.

                Jon
                Qdos Contractor - IR35 experts

                Comment


                  #9
                  Originally posted by GB9 View Post
                  I would suggest any actual substitution is a silver bullet. In fact one of the expert companies told me this using those exact words.

                  Even HMRC's defunct BETs had it down as a top point scorer, si I suggest the reason it's never been tested is that hmrc don't feel it's worth it.

                  Whether or not your client would allow it is a different matter. That's what really says whether your contract is a sham or not.
                  Yes, actual substitution would be the IR35 silver bullet. The way I read the OP was that he/she had subbed out some work. That isn't the same as sending in a substitute. We can all sub work out, the client may not even be aware that is what you are doing. Hence, my comment.
                  Public Service Posting by the BBC - Bloggs Bulls**t Corp.
                  Officially CUK certified - Thick as f**k.

                  Comment


                    #10
                    I'd be careful with substitution though. Although it's one of the main pillars it's also the weakest of the three unless actually used. It appears the standard view unless proven otherwise nowadays is that it's a sham that won't actually work. It's ok us stating that until tested it's reasonable to assume it will stand because it's in the contact but the court takes the exact opposite view. Kate Cottrell and other have stated outright that RoS is now a minor point against the other pillars.

                    This article goes as far as to say that.

                    IT contractors warned on IR35 substitution clauses :: Contractor UK

                    I can't find the exact one where she states it's a minor one...

                    But the upshot is relying on RoS that's in the contract but not tested is a very weak position to be in now. In fact looking at the number of articles coming out, I'd argue RoS is no longer a pillar unless you can prove beyond reasonable doubt you can or did.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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