IR35 Unfriendly

[Denny]

Okay then, this gives examples of how control over where work is done affects status:

http://www.hmrc.gov.uk/manuals/esmmanual/esm1020.htm



If you're working on somebody's computer system, then the nature of the work is that you must have access to that system. That gets you out of any D&C from them requiring you to work on site.

Given that most companies have strict computer security policies, they are likely to insist their intellectual property or other confidential information remains on computers that are strictly under their control. So again the nature of the work is that you have to be on site.

The way I read it, if you're a developer (and I am) then you're completely safe from D&C as the influence the client has on your work is negligible compared to the influence you have (i.e. the code you write).

That's right, but physical requirement to be on site is the key, I expect. In other words, the equipment you are working on is glued to the ground and can't be removed, the doors you are painting, the carpet or windows you are cleaning or food you are cooking etc. However, much of the work contractors do is routine report writing or some other work that can be done on Microsoft Office for which I have the complete suite on my computer at home. Therefore, I don't quite buy the security aspect you mention as grounds for physical on site presence required. It seems to me to be a very handy excuse clients will use to ensure that they can supervise the hours their contractors are carrying out.

If you sign a confidentiality agreement then you are under confidentiality irrespective of whether you are on site or not because it includes verbal disclosure of strategic materials and information as well as documented. Everyone by default has access to secrets they take home with them therefore.

Not allowing documents out of the building is an extremely dodgy argument to rely on for IR35 exemption as some senior level employees of the client may well be able to access these documents outside the building. What then? Unless you are working on a top secret project for the government whereby security clearance is required, there is a no documents removed induction policy given at the start of all assignments, bags are routinely searched every day and there is no access to e-mail outside the internal network (particularly this as you could be on site and send off attachments from your computer on site to outside, in which case in invalidates the reason for being on site as a physical requirement) then I would not trust that to be a sufficient reason for physical on site presence for most corporations.

The programme I've just finished working on was for a large corporation with extremely sensitive strategic relevance that required certain stakeholders access to the information I was working on under strict confidentiality. If there was ever an excuse for a corporation to insist on on-site working, according to your criteria, it was in this role. However, I had signed a confidentiality agreement.

Yet, I was routinely taking work out of the office and much of my correspondence and report writing under strict confidentiality printed across the top of slide decks and reports was sent from my own computer at home not the network laptop I was also issued with which I also used from home or rigged up on site when I was there.

Argument lost VM.

[malvolio]

I refer to my earlier post. It's not where you do the work, it's whether or not you have any choice in the matter because of contractual obligations. Even the dimmest Hector will accept you having to work on-site if that's the only place you can do the job.

[The Lone Gunman]

Not sure the "argument lost" statement was absolutely necessary there Den.

I do agree with you on the docs side, but the fact is that many clients are nervous of letting outside agents take documents home even if their own staff do, and isnt the fact that the staff can do something a contractor can't an outside IR35 pointer anyway?

VM does have a point and I have worked on a number of contracts where access to the software was only available on the company intranet and a lot of developers do not do loads of documents.
In a testing role I had I spent most of the day in a Eurofighter simulator and for some reason they wont let you take those home.

Somebody asked for Back to Back contracts advice.
It has been my practice recently (and succesfully) to have a clause or two in my favour.

1. The EB warrants (warrants is important in these things) that all terms are reflected in both contracts and will pick up the cost if found to be otherwise.
2. If there is a conflict in terms then my contract with the EB takes precedence.

I have struggled to get this in the past and have walked away because of this.
My point to the EB in question was that, if they were telling me the truth about the contracts then they should have no problem signing to this.

[tim123]

Precisely.

Danny. You are reading some of the comments here the wrong way.

I don't have a problem with you wanting to work in this way or disagree with why you want to.

The problem that I have is in your (apparent) expectation that clients should be forced into letting you do it and that agents should not be able to provide a placement service unless it is in the way that you want.

These two entities are commercial entities, who are entitled to put their own considerations first.

IMHO the fact is that the majority of companies have no interest at all in conforming to your business model and they are pefectly entitled to ignore your expectations if that is what they deem to be in their best interest. And if there aren't many companies looking for B2B relationships with one man limited companies, then there aren't going to be a huge number of successful agents looking to make introductions into this market.

Comming on here and ranting and raving about it is not going to change that.

tim

[Denny]

Not sure the "argument lost" statement was absolutely necessary there Den.

I do agree with you on the docs side, but the fact is that many clients are nervous of letting outside agents take documents home even if their own staff do, and isnt the fact that the staff can do something a contractor can't an outside IR35 pointer anyway?

VM does have a point and I have worked on a number of contracts where access to the software was only available on the company intranet and a lot of developers do not do loads of documents.
In a testing role I had I spent most of the day in a Eurofighter simulator and for some reason they wont let you take those home.

Somebody asked for Back to Back contracts advice.
It has been my practice recently (and succesfully) to have a clause or two in my favour.

1. The EB warrants (warrants is important in these things) that all terms are reflected in both contracts and will pick up the cost if found to be otherwise.
2. If there is a conflict in terms then my contract with the EB takes precedence.

I have struggled to get this in the past and have walked away because of this.
My point to the EB in question was that, if they were telling me the truth about the contracts then they should have no problem signing to this.

On 2 above, it shouldn't be necessary to ask the EB to sign up your terms with the EB taking precedence. These are the terms you've signed up to anyway, so that is all that counts. If any client argued the point that they have agreed terms with the EB that conflicting with my own and the EBs to justify putting me inside IR35 instead of exempted from IR35, then I would simply say that I was not party to these arrangements nor did I have access to view them at any stage so they are largely invalid. I would also take across a copy of the e-mail I got from Lawspeed who claimed to me that their EB terms with clients they draw up rarely specify 'on site working conditions' for the contractor. There's a good chance LS drew up the terms as they seem to have a very big finger in this lucrative pie and they are quoted most on the UKRecruiter website for drawing my EB terms with clients.

If the EB or client still insisted that 'de-facto' type arrangements were the 'real deal' not my terms with the EB as agreed then I would simply take civil action against the EB for supply services with deception and I would write to the client head threatening to take them to an employment tribunal on the grounds that my contract was dismissed unfairly and that I was entitled to do this as a 'deemed employee' of the company. I would also send them a list of my NI contributions due and ask them to pay them and claim for any holiday, sick and pension rights I was entitled to.

The point is this: we are businesses, we have limited companies, therefore we have a fundamental right to operate as any limited company would if we choose to do it this way. After all, it seems to me that this is the only way we can legitimately operate our businesses tax efficiently or risk going out of business. That is an unfair and unjust choice to make and we shouldn't have to make it nor should we be coerced or backed into a corner to operate like on-site client controlled employees and risk being terminated earlier for not complying. If any client treats me like an employee whilst doing the job they sure as hell not going to terminate me as if I'm in business on my own account without paying dearly for the consequences.

[tim123]

For the sake of being arrogant - but I'll say it anyway - the majority of contractors on this forum talk out of their backside, swallow Thatcherite principles of individuality for breakfast each morning by deluding themselves that they are in business on their own account whilst paying themselves small salaries and large divis whilst acting like de-facto employees on site, and call Blair/Gordon Brown socialists. That's all you need to know.

Yeah, well I am not in this group.

I am a Permatemp and (reluctantly) happy to be so. My client base wants to employ permatemps and if I want to work, that's what I have to be.

If I refused to be a permatemp, somebody else will and they will get the gig instead of me. If contractors en mass worked to rule (won't happen, but let's ignore that) and all refused to be permatemps, the client would just go to a software house or offshore his requirements.

If I want to stop being a permatemp I'd have to go around knocking on doors, banging my head against a brick wall trying to persuade a company to employ me on a B2B basis. I have asked current clients who know my capabilities if they would consider this and they all say "No, (your company isn't big enough to work with)". If you can't get current clients to chage how am I going to change the minds of people that don't know me at all.

As I've said before, in 25 years I've seen it happen just once.

Your technology sector may vary from this.

tim

[Captain Jack]

What 95% of clients want is a bum-on-seat permatemp with no rights and customer is king is far as the agents are concerned (rightly so).

[tim123]

The point is this: we are businesses, we have limited companies, therefore we have a fundamental right to operate as any limited company would if we choose to do it this way.

And the EB is a business and has a fundamental right to offer you a contract on any basis that suits its needs.

When this happens you have two choices.

Accept the contract terms on offer.

Walk away.

tim

[The Lone Gunman]

Not trying to pick a fight, just offering advice.
Perfectly happy to be shown to be in error.

The IR when deciding your IR35 status takes the reality of the working situation, not the wording of the contract into account.
A number of cases have gone to law and the IR have asked the clients HR department for the reality. The contractor has waved their contract and the IR have ignored it.

If I have terms that state my contract takes precedence it therefore becomes the reality as far as I am concerned. In law I have taken all steps needed to show that my expected working conditions are as my contract and not some notional contract declared by the IR based on working practice.

I do agree that if the EB has varied the contracts we should be able to sue them, but this is an expensive route and will only occur after we have been IR35ed.
Stating which contract takes precedence and getting a warranty from the EB circumvents this.
Also the reality of taking the EB, or even the client to law is highly unlikely. Even with the weight of the PCG behind you there is a reluctance to do this.
If you look carefully on Shout99 you will find I have proposed this route myself. I felt the Arctic case warranted such action, but understandably the Arctic chap (name escapes me) did not want to go further.

[Denny]

Yeah, well I am not in this group.

I am a Permatemp and (reluctantly) happy to be so. My client base wants to employ permatemps and if I want to work, that's what I have to be.

If I refused to be a permatemp, somebody else will and they will get the gig instead of me. If contractors en mass worked to rule (won't happen, but let's ignore that) and all refused to be permatemps, the client would just go to a software house or offshore his requirements.

If I want to stop being a permatemp I'd have to go around knocking on doors, banging my head against a brick wall trying to persuade a company to employ me on a B2B basis. I have asked current clients who know my capabilities if they would consider this and they all say "No, (your company isn't big enough to work with)". If you can't get current clients to chage how am I going to change the minds of people that don't know me at all.

As I've said before, in 25 years I've seen it happen just once.

Your technology sector may vary from this.

tim

I see your point, but are you really happy being inside IR35 but having to meet the costs of running a limited co as well or channelling all your money through a non-cost effective safe brollie?

I assume that all your contracts are usually pretty well ongoing with lots of consecutive extensions for six months at a time. If so, then fine, I would agree that being a perma temp is probably workable for you and would probably agree that on going work like this doesn't really qualify for being in business on your own account because of the continuity factor which is rare for real business operators.

However, in my field, (I'm not an IT techie) my roles are all backfill senior programme management support. I get taken on too late and terminated usually too early because the client still view my field as a 'cost' and can therefore do without me or pass my work over to someone else inside the company when the workload gets a bit thin on the ground. There is no question of me spending all day surfing the net or waiting for things to happen as I've read IT people describing their working day. There are many contractors on here who talk about year long contracts even the two year rule. For me that is unheard of. Most of my contracts last 4 months tops perhaps six months, more often than not just 3 months (although not the case with the last one which lasted 8 but that is very unusual). That means I am having to look between contracts far more often for fewer opportunities than you IT techies. For a three month contract and two months between looking for new contracts (with some fill in work for other private clients, if I'm able to get it) - this is typical for my field. At least I don't have the threat of some Indian refugee taking on my job though, like you guys.

Nevertheless, that means there is only one cost effective way to run my business, otherwise I would be out of business.