HMRC win IR35 case

[Denny]

Denny: Do you understand how security clearance works? Not taking the piss, just your reply seems a bit lacking.

The normal argument wth RoS is that "my" company will provide another employee or a sub contractor to the client. This is usualy on little or no notice .
My company can not get clearance for my employees, only the defence client I am working for can provide that. So I would have to know well in advance to get the sub cleared.
All this and more makes the arguments abot IR35 RoS extremely complicated as does control and location though not as you stated (see below)

Also: It has nothing to do with having to be on site. It is possible to take secure documents and hardware off site, as long as it will be kept secure. There are rules and I have taken work home. They are a lot more willing when a deadline is fast approaching. Obviously some stuff is not allowed off site, but most of you will never need to work with that kind of stuff.

I do know how security clearance works, as I have been cleared in the past.

I don't buy your stance at all. Your own company may provide services to the end client but only the end client can clear, so why not a sub-contractor to the end client? What so different about it? What do you think happens when Accenture want to put one of their consultant bods on the government client site to underake some work? If they can do it, why not your own company? Your own company is supplied by the EB, if you go through one, so your sub contractor is supplied via your own company. What's the difference? Getting SC is just a more convoluted process than getting an on site security pass which, again, can only be issued by the end client. I also acknowledged in my post that a realistic sub for the entire role would only be possible if the timelines permitted that didn't cause the project to fail or cause some other risk, so your point here was redundant in response to my own answer.

On the taking home of work. I was referring to those roles whereby security was so strict it was not possible to take home work, not where it was possible.

[Denny]

What they are saying is merely an extension of the clearance requirements as stated by the Cabinet Office rules. A given role requires cleared personnel, cleared personnel have to be explicitly identified (unless you're a Home Office guard, of course) hence any contract will need to have your name in it, and any sub would similarly have to be named. However, that does not then imply a contract of service, since the naming is not germane to how you actually work, merely that you be allowed to do it. So it is entirely right to say that being named can be disregarded in IR35 terms under those circumstances.

It's not the naming of the contractor that is often the problem. It is the way the contractor is named on the upper contract that matters. There is a world of difference between the EB putting....

eg. Mr Fred Bloggs, of Bloggs IT Limited will provide the services of IT Analyst

and.....

Bloggs IT Limited will provide the service of IT Analysis. Principal consultant or main point of contact Mr Fred Bloggs.

The two have entirely different connotations.

[miss marple]

The discussion is coming along nicely guys. Thank you

However, lacking in the answers so far is debate on the use of the Official Secrets Act as a defence against HMRC questions and has anyone at the Doughnut, Whitehall etc. actually been investigated?

[NotAllThere]

Oh look. They've won another one.

I have to say, I'm not convinced that the decision wouldn't be reversed on both of these if it went to further appeal. The SCs' logic seems perverse.

I'm so glad I don't work in the UK anymore.

[GreenerGrass]

Check out this recent case
http://www.contractoruk.com/news/003621.html

Aside from control, the Special Commissioner was not convinced that there was an unfettered right to substitute, despite confirmations in two letters from client representatives.

Of one of the letters, the SC reflected: “Although the letter did not indicate that the AA would wish to approve the substitute first, it was not to my mind absolutely clear that the writer intended to say that the AA did not regard itself as being entitled to require that it approved the substitution or that it would in practice wish to do so in the relevant period.”

In terms of substitution, he concluded: “The AA did not want any competent tester, it wanted Mr Bessell.”

It looks like Special Commissioner Charles Hellier is the new enemy no.1 for contractors.
Its worrying when you have someone in that position who is adamant they are right regardless of the evidence, you could be in a stronger 'outside IR35' position than 80% or 90% of contractors out there and still get found inside IR35.


I'll be intrigued to see the first case of a contractor who is Security Cleared consulting for a government agency who is deemed to be an employee.
Surely it could be embarrassing for the agency itself
SC gigs a magic bullet? Hmm...

Are we going to roll over though? Hell no. Join the PCG and fight these little Hitlers.

[Hiram King Of Tyre]

Is it just coincidence that in both cases, the contractor had been at the same company for 3/4 years. I wonder if it's best to keep it to 2 years max?

[GreenerGrass]

Is it just coincidence that in both cases, the contractor had been at the same company for 3/4 years. I wonder if it's best to keep it to 2 years max?

It may not have any legal grounding but it wouldn't surprise me if they use the 2 year rule as an unofficial pointer when deciding which cases to pursue. It certainly makes the tax take vs costs more worthwhile, and there maybe a "taking the piss" view that coincides with the temporary location/travel expenses rule.

[Archangel]

It may not have any legal grounding but it wouldn't surprise me if they use the 2 year rule as an unofficial pointer when deciding which cases to pursue. It certainly makes the tax take vs costs more worthwhile, and there maybe a "taking the piss" view that coincides with the temporary location/travel expenses rule.

How would HMRC know how long the contract had been in place unless an investigation had started?

[Spacecadet]

Seems to me that billing should be very explicit as to which task you're billing for and each task should be named on the contract and costs quoted.
Any new tasks should result in either an amendment to or a new contract, with a quote for the cost and again billed according to time spent on that task.

Nothing to do all day because the network is down? then you can't bill for the fact that the client requested that you travel 500 miles to their site as remote access is a security risk.
Or add an on site minimum charge clause to the contract.

[BoredBloke]

Email this to your local tory MP for comments. This result stinks and should get more press than it is getting. How can it be legal to determine your status based on a contract you have not seen or signed.