IR35 and software contracting

[deeter]

Hi everyone, long time listener, first time...

I made the step into (software) contracting about a year ago and did a 6 month contract via an umbrella, for convenience sake. After I saw my effective tax-rate - including NI contributions - I was aghast and decided I'd go Ltd next time, and in fact, the old client just got in touch and want to bring me in for 3 months.
I started hoovering up info on IR35 yesterday and I'm pretty shocked. MoO shouldn't be an issue, since you can clearly delineate what needs to be delivered in the contract, but as a software developer D&C and Substitution are pretty difficult points. If you're brought in to right a troubled project or help meet deadlines it's going to be pretty common that they'll want you in office to coordinate with the other developers, since you're all working on the same thing. At a cursory glance this might resemble a permi situation, but it's really not... Fully remote positions are kind of rare in my experience. It's also common to have to deal with ticketing systems and standup meetings if the software department is working effectively (agile practices).
What are you more experienced folks' opinions on these factors? (I've tried doing my research fwiw). I found the details of the infamous Dragonfly case more than a little shocking, tbh.

As regards my own situation, since the client are a small, friendly company and need me to start asap, it seems I may have to go the umbrella route again (ffs) to save playing badminton with the contract and getting new formalities in place, while doing far more setup and prep work than I imagined next time...

[WordIsBond]

Join IPSE. Use one of their contract templates.

D&C doesn't mean they spec the job, it means they decide how you do it.

The likelihood of being investigated is low and probably lower if this is a direct contract. If you are outside on the basis of MOO, you are outside. It only takes being outside on one of the three to be outside. If you think you are outside but are nervous about it, put some funds aside for the future in case HMRC comes calling. They almost certainly won't, but you are ready if they do and you are ruled inside.

If you think you might be inside, you don't have to go umbrella. You could operate inside through your Ltd. This might be better if you are making substantive pension contributions (depending on the umbrella). Pension contributions made by your limited company are before tax whether you are inside or outside IR35.

A small friendly client may be willing to work with you to ensure the contract and working practices are very IR35 friendly.

[simes]

If you're involved in stand ups, it sounds like you're involved in a project. Projects are supposed to have start and end dates. This should also provide confidence in your outside position.

I don't think it takes too long to sort out a new LtdCo and so signing a contract with your new LtdCo would benefit over and above another Brolly engagement.

Otherwise, all as WiB says above.

[northernladuk]

If you're involved in stand ups, it sounds like you're involved in a project. Projects are supposed to have start and end dates. This should also provide confidence in your outside position.
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Not at all. Permies also work on projects so having a start and an end date doesn't mean squat.

[deeter]

Thanks for the opinions guys. Appreciated.

I actually got off the phone with the client and they said another contractor is working with all the necessary clauses in place, so they're going to dig it up and do whatever's necessary.

With regard to D&C, do any of you insist on a minimum number of days working from home so to be able to demonstrate this fact? I don't mind coming into the office so much, but do see myself as very separate.

By the way, I'm happy for people to use this thread for discussing the complexities of doing software while correctly maintaining contractor status.

[northernladuk]

With regard to D&C, do any of you insist on a minimum number of days working from home so to be able to demonstrate this fact? I don't mind coming into the office so much, but do see myself as very separate.

Again no. Permies can work from home so location where you work again has little impact. Having the flexibility may be a minor pointer in your favour though not essential.

Have a read of this.
IR35:Substitution, control and mutuality of obligation

It's a fine line. There is nothing wrong with following clients procedures and frameworks. You could argue it's D&C but it's just professional courtesy to fit their processes. What you really want to be looking out for is being told what to do. I.e. work beyond what you've been contracted for. Moving you on to this and that and doing this on the side. That's bad.

One site says..

Equally, a right to determine ‘what’ work is carried out is a strong pointer to employment. It will normally be a feature whenever a client needs a worker to undertake whatever tasks are required at any particular time or where the worker is required to work as part of a co-ordinated team.

[blacjac]

Some people think coding standards indicate D&C.
Others think D&C for a coder is 'you MUST use this function on line 21, and you MUST call that variable MrFloppyChar'


Unfortunately, until its tested legally no-one really knows.


If you don't have MoO then you are fine - until the government changes the rules.