IR35 - Guilty as charged! - Updated May 2016 - NOT GUILTY!

[tractor]

...

I think that is an acceptable approach to a point. The length of time brings in a whole new level of risk though. 6 years of changing schedules without a new contract looks highly suspicious to me. It just becomes a paper exercise and the reality could very easily point at the client just giving the contractor any work going and paying lip service with a bit of paperwork. The client will just see the contractor as part and parcel to allocate work to as he sees fit. It's also highly possible the quality of this schedule starts to fail as time goes by. The fact they can find him end to end work for 6 years also looks suspicious to me as well. No breaks, no periods on the bench? MoO becomes a very big issue here. HMRC only have to speak to the client and he says 'Yeah we just find him some more work and move him on to that' and your royally ****ed. Yes new schedules are essential but are going to be a problem over time. I mean, 6 years... Surely the OP want's to renegotiate his rate or payment terms in that timescale which would require a new contract. Not a position I would like to be in at all. Quite possibly defendable but IMO one to be avoided if at all possible. The JLJ case fell over on just this point.

Having done a long stint at a client I found I had to work pretty hard at keeping the client/contractor relationship and I know for a fact a large majority of others in the same position didn't.



You are relying on the goodwill of your client and his willingness to lie on your behalf. Asking your client to fabricate the truth is incredibly dodgy ground. You are either on holiday, or there is no work to do. Document the reality of the situation.

I don't believe this is MoO anyway. I thought MoO was offering more work once the assignment was complete. There has been loads of discussion about it and still not 100% sure. Forcing contractors to take holidays is a contractual issue, not one of MoO IMO.

This is my view also but given the confusion it would be appropriate to cite periods during the contract when no work was available as a defence.

[TheFaQQer]

As I've said we paid for a seperate tax consultant to write our submission. From which he argued our case based on MOO, right of substitute and Control. I might not know much about this but I know enough, to never talk to HMRC without professional advice!

Some time back, Contractor Weekly had a series of posts about what kind of things to expect and the costs of an investigation - they may be well worth a read now.

[northernladuk]

So on a 'rolling' contract, don't you have to still sign a new contract? Or was it just like a 'statement of works' that you signed every 6 months?

Some good advice on CUK a while back led to me changing the contract terms and objectives every on renewal. I also do my best to ensure that the underlying day-to-day tasks change, as much as is realistic anyway.

I think that is an acceptable approach to a point. The length of time brings in a whole new level of risk though. 6 years of changing schedules without a new contract looks highly suspicious to me. It just becomes a paper exercise and the reality could very easily point at the client just giving the contractor any work going and paying lip service with a bit of paperwork. The client will just see the contractor as part and parcel to allocate work to as he sees fit. It's also highly possible the quality of this schedule starts to fail as time goes by. The fact they can find him end to end work for 6 years also looks suspicious to me as well. No breaks, no periods on the bench? MoO becomes a very big issue here. HMRC only have to speak to the client and he says 'Yeah we just find him some more work and move him on to that' and your royally ****ed. Yes new schedules are essential but are going to be a problem over time. I mean, 6 years... Surely the OP want's to renegotiate his rate or payment terms in that timescale which would require a new contract. Not a position I would like to be in at all. Quite possibly defendable but IMO one to be avoided if at all possible. The JLJ case fell over on just this point.

Having done a long stint at a client I found I had to work pretty hard at keeping the client/contractor relationship and I know for a fact a large majority of others in the same position didn't.

As for MOO, for those contractors that take holidays mid-contract: when planning a holiday, rather than informing the client that you will be taking 2 weeks off in August etc, wouldn't it be a good idea to get the client to write an email to you advising that they have no work for you during August and won't need your services for those 2 weeks?

Edit: on the MOO question, this is like all the banks forcing contractors to have 10 consecutive days out of the office and off the network. I had to do this at the bank I was contracted at.

You are relying on the goodwill of your client and his willingness to lie on your behalf. Asking your client to fabricate the truth is incredibly dodgy ground. You are either on holiday, or there is no work to do. Document the reality of the situation.

I don't believe this is MoO anyway. I thought MoO was offering more work once the assignment was complete. There has been loads of discussion about it and still not 100% sure. Forcing contractors to take holidays is a contractual issue, not one of MoO IMO.

[Batcher]

I didn't attack. I'm a good boy. I think folks thought you might be a sockie. Consistently misspelling HMRC was a sockie pointer.


Sent from my iMinion using Tapatalk

HMCE = the old name - Her Majesty's Customs & Excise. I can see it being used once in error but bit fishy being used all the time even after being pointed out.

I've been through an IR35 investigation and won but wouldn't give advice without knowing all the details. I would recommend joining PCG+ and handing over to them as soon as the brown envelope hits your doormat.

[TheFaQQer]

As for MOO, for those contractors that take holidays mid-contract: when planning a holiday, rather than informing the client that you will be taking 2 weeks off in August etc, wouldn't it be a good idea to get the client to write an email to you advising that they have no work for you during August and won't need your services for those 2 weeks?

It's only worth doing if it's accurate - the last thing you want during an inquiry is someone at the client saying "they asked us to write an email, so we did" which might indicate that you have something to hide.

You'd be better sending an email stating "I will be personally unable to provide services during these dates, but if it would be convenient for you, <myco> will provide a suitable replacement during this time".

[Munchers]

I hope to god you don't have to submit any written evidence for your case.

As I've said we paid for a seperate tax consultant to write our submission. From which he argued our case based on MOO, right of substitute and Control. I might not know much about this but I know enough, to never talk to HMRC without professional advice!

[ChimpMaster]

So on a 'rolling' contract, don't you have to still sign a new contract? Or was it just like a 'statement of works' that you signed every 6 months?

Some good advice on CUK a while back led to me changing the contract terms and objectives every on renewal. I also do my best to ensure that the underlying day-to-day tasks change, as much as is realistic anyway.


As for MOO, for those contractors that take holidays mid-contract: when planning a holiday, rather than informing the client that you will be taking 2 weeks off in August etc, wouldn't it be a good idea to get the client to write an email to you advising that they have no work for you during August and won't need your services for those 2 weeks?

Edit: on the MOO question, this is like all the banks forcing contractors to have 10 consecutive days out of the office and off the network. I had to do this at the bank I was contracted at.

[d000hg]

Discretion and Control

Few posting here seem to have much control.

[tractor]

...

Yes, they are only allowed to initially look back at the past year. However, if they find anything in that return (they have), they are allowed to look back over the past 6 years (sometimes longer, but I doubt that would apply).



Ouch, that's not good

Okay, you may have to forget about Mutuality of Obligation - you may have torpedoed that one. Focus on the other two - Right of Substitution and Discretion & Control.

Direction and Control

MOO may not be a lost cause if there were any periods during that time where work was not offered or was not accepted. Depends on how the OP handled leave and sickness and WFH in practice.

[centurian]

To clarify, investigation only started about 6 weeks where they asked for info evidence to as to why I was outside IR35. They're looking at one year only but I was trying to establish my risk ie how many years.

Yes, they are only allowed to initially look back at the past year. However, if they find anything in that return (they have), they are allowed to look back over the past 6 years (sometimes longer, but I doubt that would apply).

I have had two contracts over the last 6 years. The last contract was rolled on every 6 months as I was asked to do more work. I realise now and accept this is a basic mistake, I should have got a new contract signed each time.

Ouch, that's not good

Okay, you may have to forget about Mutuality of Obligation - you may have torpedoed that one. Focus on the other two - Right of Substitution and Discretion & Control.