ir35 in private sector

[jamesbrown]

I'm guessing you went wrong on the first SDC question, and said they could move you to a different task if it was mutually agreed.

Yup. Since a lack of MoO is baked out of CEST and a RoS is sufficient for an outside determination, this will be about D&C. Some of the D&C questions are more important than others. I don’t think it’s possible to get an outside determination if the client can move you around to other tasks without a new contract/formal agreement, even if you have an otherwise high degree of control over the implementation. Regardless of those details, the situation described by ms would likely be deemed outside on the “big picture”. The CEST cannot look at things “in the round”, which is central to IR35 case law.

[WordIsBond]

The CEST cannot look at things “in the round”, which is central to IR35 case law.

Right. What's disgraceful is it doesn't even try to look at things "in the round." There is not sufficient MOO here to constitute employment, and they haven't even tried to assess its existence or lack thereof.

I'd guess MS gave answers that should at least call into question whether there is SDC, which means at worst it should be a "can't determine" result. But I ran it through, giving the same answers on questions 2-4 on SDC, but answering that she could only be moved to a new task, but only with her agreement, and it showed up as inside.

So:
You can be moved to a new task but only with your agreement -- inside.
You can't be moved to a new task without a new agreement -- outside.

That's absurd. Some guy does work on my house, and I ask him to do something else and tell him I'll pay him. If he agrees without us having a new, separate, formal contract, does that make him my employee? Or is the verbal agreement a new contract?

Verbal agreements are legally binding (if sometimes hard to enforce). When you agree to be moved to a new task, you've altered the contract or entered into another one. There should be almost no difference between those two answers, certainly not enough to say that one is clearly outside and the other is clearly inside.

It is easy to see how someone at MS's client could answer this question either way. The only way she can protect herself is to formalise an informal business relationship, which then will force the client to submit it to their legal department. Or, she takes the risk of being ruled inside on the basis of someone in HR answering this one question wrong, because they don't realise that a new verbal agreement is a new agreement. It's an easy mistake to make, and one that HMRC has set people up to make with the wording of the question. They've effectively said verbal contracts / agreements don't count, which is not sustainable.

MS's post, with the answers she gave, should be submitted to the consultation as an example of why CEST isn't up to the task.

[malvolio]

...snip...
MS's post, with the answers she gave, should be submitted to the consultation as an example of why CEST isn't up to the task.

Both Dave Chaplin and IPSE are looking for such information to support their submissions...

[WordIsBond]

Both Dave Chaplin and IPSE are looking for such information to support their submissions...

Then someone who is with IPSE (I'm not anymore, FSB now makes more sense for me as my business has grown) might point it out to them

[jamesbrown]

MS's post, with the answers she gave, should be submitted to the consultation as an example of why CEST isn't up to the task.

Right, I think it would make a good case study.

I do think there is a difference between being asked, informally, to change task vs. having it formalised in a contract variation. I think it’s important to have a schedule of work and to update that formally if something changes. This does imply a greater degree of control over the delivery process. So, in that sense, I think the weighting is qualitatively reasonable. However, it also points to the more fundamental weakness of CEST, namely that you cannot mechanistically relate criteria to a dichotomous pass/fail. The CEST is conceptually flawed because it accumulates a score and mechanistically compares it to a threshold. What they should’ve done is to accept a legal review from a qualified (independent) status expert who could view the relationship “in the round”. Said expert would clearly identify the relationship described by ms as outside. I think ms could write this up and include such opinion from a status expert alongside the CEST result in responding to the consultation.

[mudskipper]

This should clearly come out outside under SDC.

How did you answer to:
Can the end client move the worker to a different task than they originally agreed to do? The answer according to your description is no, they contact you and make a new agreement for each task. You should clarify this with a generic agreement that covers your general working arrangement with them and then a very brief supplementary agreement for each new task. It can be as simple as having a schedule of work as part of the main agreement, and a one paragraph supplement for each task that says, "Mudskipper Ltd and Client Ltd agree to add the following task to the schedule of work under our master contract. The work is estimated to take X hours (or days)." Then, a brief description of the task.

Once the worker starts the engagement, does the end client have the right to decide how the work should be done? The answer should be no. They have the right to set the specs of what they want you to deliver, but not to decide how you should deliver it. They are asking for a result, not how you get there.

Can the end client decide the schedule of working hours? No.

Can the worker choose where they work? The answer here should be yes. A meeting or two to nail down specs or a meeting for delivery is not about them deciding where you work.

I'm guessing you went wrong on the first SDC question, and said they could move you to a different task if it was mutually agreed. But that's not what is happening here. They are contacting you and asking you to do a different task from what you've done for them in the past. It is a new contract. For your own protection you should formalise that in some way. I do what I've suggested above.

All answered as you suggest.

See https://drive.google.com/file/d/1saH...ew?usp=sharing

[jamesbrown]

All answered as you suggest.

See https://drive.google.com/file/d/1saH...ew?usp=sharing

If you change the answer about where the work is done to your choosing, that’s outside, right?

[mudskipper]

If you change the answer about where the work is done to your choosing, that’s outside, right?

Yes. That gives an outside, and could be argued. Most of the work is development, and done from home, but I do need to spend the odd day on site, so the chosen answer reflects the reality.

[jamesbrown]

Yes. That gives an outside, and could be argued. Most of the work is development, and done from home, but I do need to spend the odd day on site, so the chosen answer reflects the reality.

Right but, either way, I don’t think this level of sensitivity is consistent with any case law. There’s an argument for marginally less control pushing the engagement into “undecided”, but for it to distinguish between a pass and fail is pure fantasy. Afterall, this tool won’t be used as merely guidance, but as determination. I have no doubt that there are numerous unintelligible outcomes like this, but they all stem from the flawed premise that such a tool could ever work.

[WordIsBond]

Ok, so we've now identified two questions on "Control" which are somewhat subjective as to how they should be answered in this engagement. Answering either of them the "wrong" way flips the determination all the way from outside to inside, without even a handshake with "undecided" on its way through. All this on an engagement that is clearly outside. It's a great case study.

They had criticism for too many "undecided" results, clearly, and they've "fixed" it.

@JB, yes, if it is a new client. With a long-established business relationship with a supplier of materials, you'd just phone the guy and say, "I need X of item A and Y of item B, can you get them to me tomorrow?" He'd say, "Sure, I'll send you an invoice." There's no new contract or anything else beyond a verbal agreement. A business relationship with a supplier of services should be able to function similarly.

It can't, because of IR35, but that's the only reason. Suppose I've got one of my guys working on a project and the client calls and says, "We just hit a bug in the module he's working on, can you have him fix it while he's at it? Just invoice it as a separate line item." Is there any business reason I should have to say, "I'll need a new contract" or "I'll need a new statement of work"? The only reason would be if I don't trust the client to pay. IR35 forces me to do artificial things that are simply not necessary and actually could be damaging to client relations.