IR35 with multiple customers

[pauljh]

Hi All,
Being a recent contractor (again) I know my contract and "most" of my working conditions fall outside IR35 but as I also have other clients who I bill monthly does this place me definitely outside IR35? My situation is as such.

1. Main contract with a large company which makes up 98% of my profit, I work hours I suit but am expected to be always available (for every two weeks in four). I don't go into their office often (about once a month) and work for me comes in from various sources, but the priority of this work is controlled by one permy individual.
2. I buy/sell small amounts of IT equipment for some small businesses.
3. I do (and bill) some IT support to other small businesses.

Some of the people in my main contract do "view me as a permy" just because they've know me on and off for years and I'm the one that answers the phone when they call.

Is my company outside IR35 because I have other clients? or is it not that simple...

Ta!

[rsingh]

IR35 is determined on a per contract basis. Whether you are caught by it or not wil depend upon the contract and the actual working practices. You could have several contracts and some of those contracts could be deemed to be caught by IR35.

[thunderlizard]

It's not that simple, especially as the 98% is a high enough proportion to make it potentially "your job". IR35 is decided(in theory) and charged (in practice) on each individual contract, so the other contracts needn't come into it.

But as you say, you can choose your own hours and premises as long as you get the work done so I'd bet you the rest of my lunch that you're outside.

[pauljh]

IR35 is determined on a per contract basis. Whether you are caught by it or not will depend upon the contract and the actual working practices. You could have several contracts and some of those contracts could be deemed to be caught by IR35.

That just sound's ridiculous, so the ONLY reason I could be caught by IR35 is the fact I'm a one man band?, so IR35 discriminates against number of people in a company?. What happens if for example one month I go into my clients office and sit with all their permy's and work 9-5 doing the same job as them and then the next month I work remotely doing hours to suit me and doing items no-one else in the company can do?

Where does working practice come in?, is in is it based on what happens most of the time, some of the time, occasionally?, What if my role is so specialized and unique I couldn't "easily" substitute? and so am an integral part of the company performing without them incurring massive costs (from getting different company X doing the task at 100x the price)
Surely the phrase "Is the contractor “part and parcel” of the client’s organization" is ridiculous as ANY company (regardless of being a one man band contractor) want to provide such a service that the company taking their services can't do without them?

I can only see that as IR35 has no "real" defined criteria (The process involves painting a picture in each individual case) means that if you get caught by IR35 will depend on if the revenue employee is in a bad mood and can "manipulate" some very non-descriptive sentences to apply to your working model then you'll be up for a massive tax bill?

Am I missing something?, as I can only see IR35 as a massive rag trying to pull in some money based on lose rules and no real definition.

[Whenimgone]

IR35 guidelines

There are some Inland Revenue guidlines here: http://www.hmrc.gov.uk/about/hmrc-06-07-acc.pdf
Also, the original interpretation by the BBC: http://news.bbc.co.uk/1/hi/business/1256031.stm

But as rsingh says, it's a on per contract basis. Two days a week doesn't necessarily exempt you from "employee status". Only your contract and your working practices can do that and you should pay due care to them accordingly

[pauljh]

It's not that simple, especially as the 98% is a high enough proportion to make it potentially "your job". IR35 is decided(in theory) and charged (in practice) on each individual contract, so the other contracts needn't come into it.

But as you say, you can choose your own hours and premises as long as you get the work done so I'd bet you the rest of my lunch that you're outside.

That sound's good, but I do tend to do 9-5 (and then a few hours occasional outside) and some people in the organization "expect" me to be available during these times unless I inform them I won't be be.
So should I take two contracts and do 25 hours a week on each just to avoid IR35? or would that mean both could be caught by IR35 as I could effectively be employed by both company's on a job share/part time basis?

[rsingh]

That just sound's ridiculous...

I can only see that as IR35 has no "real" defined criteria (The process involves painting a picture in each individual case) means that if you get caught by IR35 will depend on if the revenue employee is in a bad mood and can "manipulate" some very non-descriptive sentences to apply to your working model then you'll be up for a massive tax bill?

Am I missing something?, as I can only see IR35 as a massive rag trying to pull in some money based on lose rules and no real definition.

You have hit the nail on the head - it is ridiculous as we now have to spend inordinate amounts of time checking up on compliance when we could be working. HMRC are stupid. Their default position is that we are guilty and it is up to us to prove our innocence.

[rsingh]

So should I take two contracts and do 25 hours a week on each just to avoid IR35? or would that mean both could be caught by IR35 as I could effectively be employed by both company's on a job share/part time basis?

Again, it depends upon your working practices. Firstly, you work for your Limited company which services clients. It appears you have some flexibility in hours and location which can help as a pointer to being outside of IR35.

I wouldn't worry too much, in the sense that you can get your contract reviewed and get IR35 insurance. If you believe that you are outside of IR35, act accordingly and hope that you never have to use your insurance.

[Not So Wise]

I can only see that as IR35 has no "real" defined criteria (The process involves painting a picture in each individual case) means that if you get caught by IR35 will depend on if the revenue employee is in a bad mood and can "manipulate" some very non-descriptive sentences to apply to your working model then you'll be up for a massive tax bill?

Am I missing something?, as I can only see IR35 as a massive rag trying to pull in some money based on lose rules and no real definition.

You got it in a nutshell

[Rupert Matthews]

The Contract is the Key

The answer to your original question "does this place me definitely outside IR35?" is No.

If you are looking for a silver bullet then you need either:
- a reasonably unfettered right to provide a substitute
- a lack of client control over how / when / where you perform the work

Otherwise I'd suggest getting it reviewed for peace-of-mind.