Task overran - not billing client - Does that guarantee you're outside IR35?

[PTP]

A task has taken me 5 days longer than I agreed it would. It was a messy/frustrating task but when I look at it I admit it shouldn't have taken me as long as it did.

So far I've been thinking that I'm closer to inside IR35 than outside - or at least the client wants to think they've got more control than I want to give them. For this reason I suspect they've been thinking of me as like an employee and so I bet they wouldn't challenge me if I sent a timesheet/invoice for all the time I have spent on that task.

So I was wondering, If I refused to invoice them for these 5 days work on the grounds that I had agreed it wouldn't take me that long, then would that guarantee that I am outside IR35? or are there too many other factors that could still outweigh it and put me inside?

If it would guarantee I'm outside then the 5 days of lost money would be miles less than the extra money I get to keep from the many other months.


Thanks

[northernladuk]

As this is only a pointer and not a deal breaker for IR35 I would be tempted to bill and look at other elements of my work for evidence. The fact you can bill them for the extra days makes your role flexible and not under client control anyway so surely helps your case??

[Greg@CapitalCity]

That in itself would not guarantee your IR35 position, but it would be a useful pointer to show you take on financial risk as part of supplying your services.

The recent case JLJ Services Limited v HMRC is useful for you because you mention degrees of control. Control was a significant factor in this case (to the detriment of the contractor) so I would suggest you take a long hard look at this aspect of your current engagement.

[PTP]

Thanks NLUK & Greg

After reading JLJ Services Limited again, it's reminded me of the fact that I have read of cases where someone has been judged to have gone from Outside IR35 to being Inside IR35.....but I haven't yet read any cases where someone has been judged to have gone from being inside to being outside. Has this ever happened?

The reason I ask is, if I get a renewal in 1 months time then there are some tweaks I'd like that would make it more IR35 friendly - including a more specific project on the contract. It just seems too good to be true that you can work inside IR35 for 3 months but then get a renewal with more IR35 friendly terms and be outside while still with the same client. So is this possilble / has it happened?

[Greg@CapitalCity]

So is this possible / has it happened?

I think you would need to do this very very carefully. I am not aware of an instance where this has happened, but that is not to say it hasn't. Any new IR35 friendly contractual additions would need to be carefully backed up with changes in work practices also.

As always, I suggest you get IR35 advice from a legal specialist. Try Contract lawyer (UK) Roger Sinclair Egos Ltd, or Bauer & Cottrell - Expert IR35, Section 660 and Employment Status Advice.

[Clare@InTouch]

Thanks NLUK & Greg

After reading JLJ Services Limited again, it's reminded me of the fact that I have read of cases where someone has been judged to have gone from Outside IR35 to being Inside IR35.....but I haven't yet read any cases where someone has been judged to have gone from being inside to being outside. Has this ever happened?

The reason I ask is, if I get a renewal in 1 months time then there are some tweaks I'd like that would make it more IR35 friendly - including a more specific project on the contract. It just seems too good to be true that you can work inside IR35 for 3 months but then get a renewal with more IR35 friendly terms and be outside while still with the same client. So is this possilble / has it happened?

If I remember rightly this was brought up in the Dragonfly case - the contractor started on a contract and when renewal came he had the contract amended to be more IR35 friendly. Those changes didn't help his case as they were deemed to be inserted purely for IR35 'get out' reasons, rather than any actual change in conditions.

Besides, it's the conditions that really matter, not the written terms (although it helps if the two are the same).

Edit: Here you go.......

A combination of factors brought this case down. The simple fact that it concerned a succession of contracts and extensions, commencing before the introduction of IR35, all for the same client, the terms of which contracts changed in details from contract to contract, left a fair degree of uncertainty as to what the terms actually were. Plus, the succession of changes, intended to create a more IR35-friendly background, probably lead to the conclusion that they were solely there for that purpose, and thus undermined their own credibility – the damage had already been done.

http://www.contractoruk.com/ir35/why...ot_caught.html

[PTP]

Thanks Claire & Greg

Hopefully the last IR35 question from me for a while:

Same client has a different project available. It's 200+ miles away from the site I've been working on so far.

The main reasons I'd like to go for it: I think it more closely matches what I'm good at and so I'd be more successful at / more in my comfort zone (i.e. the main reason for wanting the move isn't the tax implications).

Other reasons: From reading test cases, I get the impression it helps if you can say that the project you are working on is using a skill/doing a task that you couldn't get a permanent job in. I think this other project satisfies that.

If I did go for it / was offered it (a big if), I think I've read that for MOO reasons I should submit an application for it instead of just moving.

So I was wondering, would doing a completely different project 200 miles away based around a skill that you couldn't get a permanent job with and you've had to make a fresh application for, get assessed for IR35 by the taxman completely independently of the first contract? Or would he still try and link them and say "You're first was inside and so I feel you're 2nd must me too"?

Thanks

[Clare@InTouch]

Thanks Claire & Greg

Hopefully the last IR35 question from me for a while:

Same client has a different project available. It's 200+ miles away from the site I've been working on so far.

The main reasons I'd like to go for it: I think it more closely matches what I'm good at and so I'd be more successful at / more in my comfort zone (i.e. the main reason for wanting the move isn't the tax implications).

Other reasons: From reading test cases, I get the impression it helps if you can say that the project you are working on is using a skill/doing a task that you couldn't get a permanent job in. I think this other project satisfies that.

If I did go for it / was offered it (a big if), I think I've read that for MOO reasons I should submit an application for it instead of just moving.

So I was wondering, would doing a completely different project 200 miles away based around a skill that you couldn't get a permanent job with and you've had to make a fresh application for, get assessed for IR35 by the taxman completely independently of the first contract? Or would he still try and link them and say "You're first was inside and so I feel you're 2nd must me too"?

Thanks

I think if you can prove the two are unrelated then you have a good chance of arguing they shouldn't be considered as the same contract from an IR35 point of view too, although it would no doubt be mentioned and have to be defended (which is an extra bit of pressure during an enquiry).

The problem, well one among many actually, with IR35 is that until you end up in Court it's hard to give a definitive "Yes this will get you out of IR35" as it's highly subjective and there are so many grey areas. We can refer to legislation and quote case law, but it's rarely a simple question.

[LisaContractorUmbrella]

Establishing your IR35 status means taking many factors of your working practises into consideration; a contract can be amended however you like but the amendments won't stand up if they don't reflect reality. You will need to look at:

What is the client's business?
Is there any form of contract?
Are you at financial risk in the project?
Are you working exclusively only for one client?
Do you work with your own materials and equipment on site?
Do you have to rectify work at you own expense?
Can you provide substitutes to carry out the work in your place? Recent IR35 cases would indicate that you would actually have to know someone to act as substitute and you would have to know that they would be available
Are you "part and parcel" of the client's organisation?
Is the contract project based with deliverables and milestones?
Terms of contract – e.g. do you have a notice period, what are the hours of work, where and how is the work carried out?
The pay structure e.g. are you paid by the job/project or a fixed wage at a fixed time (as an employee would be);
Are any benefits provided similar to employees (company car/van, sick pay bonuses etc.) and
Has any Government Department (Inland Revenue/Contributions Agency) ever provided a written status ruling in the past?

HTH