IR35 sanity check....

[b0redom]

I may be wrong here, but....

I thought the 3 main tenets of IR35 were:

• MoO
• RoS
• D&C

I started a public sector gig back in June last year and was told, 'it's inside IR35, take it or leave it'. The rate was OK, so I took it.

I've literally just received a notification of my IR35 status, and it says:

You have no RoS
You are subject to D&C as we expect you to work with your line management to schedule milestones etc, and may be required to attend site occasionally for team meetings. This is similar to flexible permies.

So far so annoying.

I was, however, along with every other contractor in my team, furloughed over Christmas. This demonstrates that MoO does not exist for me, and I thought all 3 had to apply for a contract to be inside IR35? The status review doesn't mention MoO at all.

[DaveB]

I may be wrong here, but....

I thought the 3 main tenets of IR35 were:

• MoO
• RoS
• D&C

I started a public sector gig back in June last year and was told, 'it's inside IR35, take it or leave it'. The rate was OK, so I took it.

I've literally just received a notification of my IR35 status, and it says:

You have no RoS
You are subject to D&C as we expect you to work with your line management to schedule milestones etc, and may be required to attend site occasionally for team meetings. This is similar to flexible permies.

So far so annoying.

I was, however, along with every other contractor in my team, furloughed over Christmas. This demonstrates that MoO does not exist for me, and I thought all 3 had to apply for a contract to be inside IR35? The status review doesn't mention MoO at all.

HMRC disregard MOO in the CEST, the assume it exists by the very existence of a contract.

This is the way of the world now, get used to it.

If you don't like it walk and find a genuinely outside gig. They do still exist, ironically a lot of them are in the Public Sector..

[northernladuk]

Furlough is nothing to do with MoO. You take holidays which is the same thing as furlough in reverse. Its the way T&M contracts are. You get paid by the day. Sometimes you can't, work sometimes they don't want you to work.

Mutuality (or lack there of) is the obligation of offering extra work AFTER the piece of work you've agreed to do. While you are in contract with agreed SoW or whatever there are types of obligation in play. MoO is lack of obligation once the agreed obligation has ended.

[b0redom]

Fair enough then.

[Scruff]

It's important to understand that IR35 legislation is taxation related. Furlough is an employment concept. Therein lies the inherent fault with the legislation, since it fails to align taxation and employment rights.

It'll not be long before an at-risk Barrister will take this on through the Courts, on behalf of an affected contractor/disguised employee, as a measure to attempt to align the rights with the legislation.

[Lance]

they could declare you as inside even if none of the criteria fit.
As that may well suit their attitude to risk. If you're all inside they'll never be investigated and have to justify it.

[Patrick@Intouch]

Furlough is nothing to do with MoO. You take holidays which is the same thing as furlough in reverse. Its the way T&M contracts are. You get paid by the day. Sometimes you can't, work sometimes they don't want you to work.

Mutuality (or lack there of) is the obligation of offering extra work AFTER the piece of work you've agreed to do. While you are in contract with agreed SoW or whatever there are types of obligation in play. MoO is lack of obligation once the agreed obligation has ended.

MOO is complex and doesn't only refer to obligations outside of the current agreement. In order for MOO to exist there has to be obligation on the engaging party to offer work and on the engaged party to accept. This applies equally to within the current contract and after it.

It's helpful to think of this in terms of what it would look like in employment.

If you've finished work on a part of a wider project ahead of schedule and need to wait for someone else to finish what they are doing before you can start the next piece of work then your client "could" thank you for your efforts and tell you there's no more work until the next sprint starts. That shows that they have no obligation to find work for you or offer work to you.

If you were an employee in the same situation then they would of course find something else for you to do as they would still be paying you.

If that same client though offered you work to fill the gap but you turned it down as you were aware that you were going to be ahead of schedule and had something else lined up for a few days/weeks then that would show that you were under no obligation to accept work.

If you were an employee in the same situation then they would of course have to accept the work assigned.

Both of the above scenarios would be examples of how MOO doesn't exist within a contract.

[Patrick@Intouch]

You are subject to D&C as we expect you to work with your line management to schedule milestones etc, and may be required to attend site occasionally for team meetings. This is similar to flexible permies.

Control with regards to IR35 status isn't about scheduling milestones, that's just setting out what's required operationally to get a project delivered on time and therefore (potentially) within budget.

It also isn't about attend site occasionally for team meetings. If you are working on something that both external and internal resources are working on then it's reasonable to expect both resources to communicate re progress, snags etc...

Control with regards to IR35 is concerned with the way in which you work and how you complete tasks assigned to you. If you use your own methods and processes and aren't told how to do what you do then that would be an indication of a lower risk of the role being "caught by" or "inside" IR35.

You can be told what to do and when to do it by (completely reasonable real world stuff) but as long as you're not told how to do it the Control shouldn't apply.

[b0redom]

Control with regards to IR35 status isn't about scheduling milestones, that's just setting out what's required operationally to get a project delivered on time and therefore (potentially) within budget.

It also isn't about attend site occasionally for team meetings. If you are working on something that both external and internal resources are working on then it's reasonable to expect both resources to communicate re progress, snags etc...

Control with regards to IR35 is concerned with the way in which you work and how you complete tasks assigned to you. If you use your own methods and processes and aren't told how to do what you do then that would be an indication of a lower risk of the role being "caught by" or "inside" IR35.

You can be told what to do and when to do it by (completely reasonable real world stuff) but as long as you're not told how to do it the Control shouldn't apply.

I appreciate all that, but that's a hard fight to win. Furloughing staff over Xmas seemed to be to a bit more straight forward. Or at least it did. I mean you wouldn't tell your permies (and in fact they didn't) 'you are not allowed to work for the next 2-3 weeks'.

[eek]

I appreciate all that, but that's a hard fight to win. Furloughing staff over Xmas seemed to be to a bit more straight forward. Or at least it did. I mean you wouldn't tell your permies (and in fact they didn't) 'you are not allowed to work for the next 2-3 weeks'.

I suspect next christmas a lot of banks will be "furloughing" their now inside IR35 workers.

I wouldn't hold it out as the great escape plan you think it is.