Outside IR35 now even harder to prove PGMOL ruling

[willendure]

A write up on the recent PGMOL vs HMRC ruling:

https://www.linkedin.com/pulse/what-...g-pgmol-yjgsc/

tldr; mutuality of obligation can come down to as little as I did the work/you pay me AND the issue of control does not need any significant bar to clear either.

Basically anyone who works for a single client for any length of time can now be construed as inside.

Seems like the right to subsitution and actually acting on it is about the only thing left.

[WTFH]

Basically anyone who works for a single client for any length of time can now be construed as inside.

Which is fair enough. If you're working for one client for more than a year or two, and it's not on a specific project which has a short timeline and specific deliverables, then what is the difference, I mean, apart from the tick box exercises you go through to try to justify that you are different?

I work on the principle of: I go in to a client because I have skills and experience they do not have, but they need a solution for a defined problem/project. I use my skills and experience to deliver that solution. Once delivered, they have no further need for my skills and experience, since the solution is now delivered and handed over to them to maintain.
It's a bit like the Tao of Steve: Be Desireless, Be Excellent, Be Gone.

[cojak]

I would only be with a client for a single project. Once it ended/got cancelled, I was off.

[jamesbrown]

Agree with the title, but your analysis is a bit mickey mouse, tbh. There was no time element to this case. Duration remains largely irrelevant, except w/r to a change in relationship, i.e., becoming part and parcel. It did confirm HMRC's view (reflected in CEST) about MoO being present by default (of a contract), which is the big news here, and it also lowered the bar or clarified the control test further. If there is sufficient control, MoO and no clear RoS, then it's going to be inside, no matter whether the contract is for a couple of months (~temp employment) or much longer.

[willendure]

Yeah - I didn't express myself very well. When I said any "length of time", I literally meant "any", rather than "for a prolonged period". What I really meant is that if you work for a single client, there is MoO and control by default. I think the situation might be different if say you made artworks on commision and had lots of clients requesting stuff from you, since then you would be "in business" and would be choosing how you allocate your time and effort to each little project. Or the opposite way around, if you run a consultancy and can allocate any of your consultants to your single client as you see fit, then by exercising the RoS none of your consultants is specifically controlled by or has MoO with the client.

One of the linked in commentors is saying - if I hire a plumber, and I insist they personally do the work (not their apprentice), MoO and control exist so am I now their employer?

On the subject of RoS, is it enough to have a clause in a contract permitting it, or does it have to be exercised to be really present?

[malvolio]

Yeah - I didn't express myself very well. When I said any "length of time", I literally meant "any", rather than "for a prolonged period". What I really meant is that if you work for a single client, there is MoO and control by default. I think the situation might be different if say you made artworks on commision and had lots of clients requesting stuff from you, since then you would be "in business" and would be choosing how you allocate your time and effort to each little project. Or the opposite way around, if you run a consultancy and can allocate any of your consultants to your single client as you see fit, then by exercising the RoS none of your consultants is specifically controlled by or has MoO with the client.

One of the linked in commentors is saying - if I hire a plumber, and I insist they personally do the work (not their apprentice), MoO and control exist so am I now their employer?

On the subject of RoS, is it enough to have a clause in a contract permitting it, or does it have to be exercised to be really present?

Who knows? HMRC are being allowed to rewrite the law to suit their own agenda. RoS has always been a weak defence, but the RMC ruling defined it as having to be a genuine right, then it became do it to prove it, now you can ignore the contract terms if they get in the way.

[vetran]

Commitment to abolish IR35 mentioned in Reform speech yesterday.

[willendure]

Who knows? HMRC are being allowed to rewrite the law to suit their own agenda. RoS has always been a weak defence, but the RMC ruling defined it as having to be a genuine right, then it became do it to prove it, now you can ignore the contract terms if they get in the way.

Just seems to me that HMRC have carte blanche to persecute any outside IR35 contractor and shake them down for £50K or whatever they calculate they owe in back taxes. Time to get out of this racket perhaps.

[willendure]

Agree with the title, but your analysis is a bit mickey mouse, tbh.

jamesbrown I apreciate your responses on this and other threads, you always seem to bring clarity. So if you will, an example scenario for you?

Suppose you have just been offered a 6 month outside contract in IT, as a software developer, nicely paid. The contract is on your desk awaiting signature. In order to satisfy yourself that the contract is genuinely outside of IR35 and there is no risk HMRC coming after you... What things would you absolutely insist that it must contain? What things would you absolutely insist that is must not contain? And what actions would you absolutely insist on the client carrying out (such as letting you substitute someone to prove RoS is genuine)?

[malvolio]

jamesbrown I apreciate your responses on this and other threads, you always seem to bring clarity. So if you will, an example scenario for you?

Suppose you have just been offered a 6 month outside contract in IT, as a software developer, nicely paid. The contract is on your desk awaiting signature. In order to satisfy yourself that the contract is genuinely outside of IR35 and there is no risk HMRC coming after you... What things would you absolutely insist that it must contain? What things would you absolutely insist that is must not contain? And what actions would you absolutely insist on the client carrying out (such as letting you substitute someone to prove RoS is genuine)?

You've not been paying attention. It is the reality of the engagement that matters, not what the contract says.

And the client can reverse their IR35 status after you have started work. The same old rules apply for D&C, RoS and MoO, they just have to be right in practice.