IR35 and indirect benefits not provided by the client company

[tomhafiz]

Hi All,

I understand that IR35 determination is affected by direct benefits provided by an employer (e.g. a contractor using the company car park, or using the company subsidised canteen, etc, which are benefits an inside IR35 employee should be receiving but not an outside ir35 contractor).

I am currently on an outside IR35 gig for a healthcare based academic institution through my Ltd. This allows me to potentially qualify for a debit card called Ode for people who provide healthcare based services (i.e. the card gives cashback on certain retailers) although I have to confirm my healthcare based service through my work email via a confirmation email. Consulting for the institution also potentially gives me access to Eduroam which means internet access around the UK (or even other countries) through universities wifi networks again through my academic email address I think.

Now neither of these benefits (Ode card, or Eduroam) are provided directly by the company ("employer") as a benefit so my question is would the use of an Ode debit card or Eduroam infringe IR35? I suppose use of Eduroam would be more deemed a direct benefit in some ways. The debit card is provided by a third party company but I do have to use my academic email address as proof to get it.

Any advice much appreciated - I realise IR35 is a nightmare. And by the way how many people a year are found to be incorrectly deemed to be outside IR35 when they should be inside by HMRC? I couldn't easily find that out - is it a mere handful or in the thousands?

[ladymuck]

So it's an industry benefit, not an employer/client provided one?

In my eyes, that's got nothing to do with IR35.

[Lance]

So it's an industry benefit, not an employer/client provided one?

In my eyes, that's got nothing to do with IR35.

I agree. It might be a breach of the Ts & Cs of the benefit provider, but meh.

My LTD. gets an education discount for Adobe Creative because my wife has an email address for an .ac.uk domain. That is a bit dodgy, possibly even fraud, but in no way impacts any tax/IR35 status.

[northernladuk]

In my simplistic view I'd personally say both the above are wrong. This comment alone rings the alarm bells

Now neither of these benefits (Ode card, or Eduroam) are provided directly by the company ("employer")

Just the fact the term employer has come in means it's not for the OP. Whatever the arrangement it is a benefit arranged by the employer for the employees. The OP is not an employee and needs to be doing their best to make sure they don't look like one. They are able to claim because of a loophole but not in the spirit. Having a provided email makes them eligble which is a play on the process. The few times I've seen this the process then goes on to ask for an employee number, which could also be circumvented, but the fact it does also makes it clear who it is intended for.
It is quite possible that because they are using the process incorrectly these benefits will be available to the OP after they've left which becomes even more wrong on different levels. It's highly likely as the OP is not part of the employee leavers, movers, joiners process they won't have their access revoked properly.

In my mind this is a clear case of the OP using benefits designed to be used for employees which is a clear flag for IR35. The semantics would be irrelvant should a court look at it. The bottom line is an outside contractor is making use of benefits designed (albeit very badly) for employees and investigation would be all over this like a rash. Might be a minor flag but if the OP wants to know if it's going to cause a problem for IR35 I believe the answer is yes.

I think greed is driving the OP to try justify this but it shouldn't. It's designed for employees so should not be touched, regardless of the lax processes.

I'd question the comment about employee benefits available to inside IR35 contractors as well. Yes you can use them because you don't have a tax position to defend but they are still designed for employees not suppliers.

All that said, in the T&C's for these services if it explicitly says it's available to suppliers as well then fill your boot, but if it doesn't walk away.

[northernladuk]

I remember AstraZeneca having a deal with Vodafone where you supply your contract details via AZ email for a discount or something. Word went round the contractors and most were jumping on it. Read the blurb and it had 'Employees' all over it. One line even said 'this benefit for employees'. So even though we had AZ email it was clearly for employees. IR35 flag for sure.

[eek]

I remember AstraZeneca having a deal with Vodafone where you supply your contract details via AZ email for a discount or something. Word went round the contractors and most were jumping on it. Read the blurb and it had 'Employees' all over it. One line even said 'this benefit for employees'. So even though we had AZ email it was clearly for employees. IR35 flag for sure.

The freebie attached to a corporate phone deal would definitely be a red flag.

I'm not so sure I would be claiming IR35 on the industry level type deals which are there because a third party wishes to provide marketing services to companies wishing to target specific markets - as I cannot see the direct connection there.

I think we've found one of those areas where I would agree with you on the Vodafone side of things (deal is due to relationship between vodafone and AZ) and ignore it on the Ode and Eduroam side of things as the relationship is different.

[northernladuk]

The freebie attached to a corporate phone deal would definitely be a red flag.

I'm not so sure I would be claiming IR35 on the industry level type deals which are there because a third party wishes to provide marketing services to companies wishing to target specific markets - as I cannot see the direct connection there.

I think we've found one of those areas where I would agree with you on the Vodafone side of things (deal is due to relationship between vodafone and AZ) and ignore it on the Ode and Eduroam side of things as the relationship is different.

True but for me the blurb attached to the benefits the OP suggests is key. If it's employee focussed and is clearly meant for employees then there is the answer. If somewhere in the T&C's it says anyone then OK. But if the OP is asking if this is an IR35 issue you can't for one minute think a court won't ignore the focus of 'employees' in the literature. You could be totally right about the different relationship but if it looks like a duck and quacks like a duck....

[tomhafiz]

Thanks, quite a lot of mixed opinions but mostly on it being an industry benefit and nothing to do with IR35. I've checked the Ode debit card terms and conditions and it's just a standard banking t&c - no mention of employees. It does seem just an industry benefit and nothing to do with employers benefits (pension, gym membership, subsidised canteens, etc) as it's not something that employers are providing, just something a bank is providing to people in various industries (healthcare, education, charities, etc, basically a different flavour of Ode card for each industry).

I've looked at the eduroam.org site but couldn't find strict terms and conditions there, only an AUP so perhaps something to be avoided when travelling around the world and I should just use a hotspot. I've just thought of another industry benefit - Apple education discount through the Apple education portal, no idea if that is marked for employees or anyone in the industry and I don't have the time to check. There are surely other indirect benefits too in various industries that contractors work in....

I did google this question of indirect benefits and IR35 determination before asking on this forum as I thought it would be a common question but I was surprised to find no information whatsoever on the HMRC site or on any forum, I guess no one has asked about these things before.

[northernladuk]

IMO it does have something to do with IR35. You are using your client to get it. It's available to employees so very much has something to do with IR35. Yes, the terms are a bit woolly but if you look in the FAQ's for the card it says

You will need a valid/current work email address to sign up. If you don't have an email address but work within the health sector, please reach out and contact your HR or IT department to obtain one. That way, you can sign up.

You don't work in the sector, you are a supplier supplying service to a client that works in the sector. By saying you are working in the sector through your association with your client that will be seen as a flag to being part and parcel of the org. IR35 flag. The fact it mentions HR or IT dept would indicate it's for employees. HR isn't for suppliers.

So they don't mention it explicitly as I expect the didn't envisage suppliers wanting it so didn't need to be clear.

Also.. if you need your clients email to register what are you going to do when you leave the gig and lose the email address, you are going to lose access to it so it's only a benefit while you are working for that client. Pain in the ass to close it down when you can't contact them and prove who you are without the address.

You can apply for the Ode through the healthservicediscounts site which says...

Our discounts scheme is for all staff who work in the health service sector, in any role.

This includes everyone who works in the NHS, private hospitals, agency/bank staff, GP staff, dental practice, pharmacy staff, hospice staff, all retired staff, healthcare volunteers and healthcare related charity staff.

You are not staff, and you do not work IN the the NHS, you supply to them. Suppliers are not mentioned in that list.

If you think you are eligible just because you have an email then you are just kidding yourself. A court will see through this in an instant.

If you want discounts for your industry why not just join IPSE?

[eek]

Anything where they allow retired and former workers to retain membership is going to result in great difficultly proving it's an IR35 indicator.

I think you really are trying to make a mountain out of a miniature model ant hill