HMRC deliberately omitted MOO from ESS/CEST

[TheFaQQer]

Q: If Hired for future work for pay means you have mutuality of obligation, when would you not have mutuality of obligation? It is a test, not a given, in employment law is it not?.
A: It would rarely if ever be be the case in public sector hiring. That is why we did not put questions into the tool about it.

Q: Umbrella companies are saying you're okay due to mutuality of obligation being in point?
A: Yes we have seen people assert this in the past as if it were a magic bullet. But it it is important to actually have regard to the terms under which NHS locums are engaged. They are offered work, in
advance, a particular shift or series of shifts and they cannot simply walk away from that work without meeting their obligation. They are contractually entitled to pay for these shifts. So all the minimum elements are present.

Not sure I agree with their definition of MOO

[northernladuk]

Looks like the same classic mistake we've seen plenty of times on here.

[eek]

Once again HMRC dance on the edge of a pin to ensure the information matches their interpretation and not the actual law..

[malvolio]

The case law actually talks about an irreducible mutuality of obligation. That leaves room for interpretation of what is a "reasonably" (another legally valid term) irreducible minimum. Turning up for work you have agreed to does not therefore mean a mutuality; having to turn up whether you have agreed or not or be penalised in some way (such as no more work will be offered) is.

All, of course, IMVHO.

[TheFaQQer]

The case law actually talks about an irreducible mutuality of obligation. That leaves room for interpretation of what is a "reasonably" (another legally valid term) irreducible minimum. Turning up for work you have agreed to does not therefore mean a mutuality; having to turn up whether you have agreed or not or be penalised in some way (such as no more work will be offered) is.

All, of course, IMVHO.

From the HMRC slide deck explaining the rules to NHS people:

Myth: There is no ‘mutuality of obligation’ in my contract therefore I am self-employed.

It doesn’t make me self-employed. There is ‘mutuality of obligation’.

[meanttobeworking]

HMRC deliberately omitted MOO from ESS/CEST

So would I be right in thinking that, even by HMRC’s twisted definition of MOO, if a contractor is engaged for a period of time, and during that time the engager on occasion says “sorry, no work for today, don’t come in and don’t invoice”, that demonstrates a clear lack of MOO and should be kept as pretty compelling evidence that the arrangement is outside IR35 on the basis of no MOO?

And if I’m wrong, what *would* be a clear demonstration?

[meanttobeworking]

Further to the above, this article seems to suggest this might be the case:

https://www.qdosaccounting.com/ir35-meaning-of-moo/

This was demonstrated in another IR35 case, Marlen Ltd v HMRC (2011), which was heard before the First Tier Tax Tribunal. Mr Hughes (contractor) provided engineering, design and drafting services to JCB. There were some occasions when the computer servers broke down, and the contractors were sent home, without pay, whereas JCB employees remained in place and were remunerated. This showed that JCB did not consider itself under any obligation to provide work or pay even after an offer had been made and accepted. Marlen terminated the contract early when a better off came along, further confirming that both parties understood that the contract could be terminated at any time and without consequence. The Tribunal, therefore, had no hesitation in concluding that the relationship between contractor and end client was one in which MOO was not present.

[malvolio]

Further to the above, this article seems to suggest this might be the case:

https://www.qdosaccounting.com/ir35-meaning-of-moo/

Precisely. That has been the case right back to the original RMC case in the 70s. HMRC are either ignorant of the fact, or are deliberately lying to their audience. Either option is totally deplorable.

The weakness here is that FTTs do not define case law, which would be HMRC's defence. It needs an appeal in a higher court. However going back to earlier cases, the test is twofold; the employer has to offer work and the worker has to accept it. I don't see that the NHS has to offer work to a given locum, nor does the locum have to accept it (although if he does then he has to deliver the work). I contend that fails to the demonstrate the level of MoO needed to define the locum as an employee.

A neat summary of the whole "are you an employee" argument is here.

[northernladuk]

Isn't just the mention of locums a problem. There has been plenty of opinion they were inside anyway so a poor indicator of anything that would affect us?

[malvolio]

Isn't just the mention of locums a problem. There has been plenty of opinion they were inside anyway so a poor indicator of anything that would affect us?

No. Distinguish between locums that take on longer contracts compared to those who are used to fill in gaps in resources on an as-needed basis. The former may be depending on their contracts and Ts&Cs, the latter probably aren't. The "disguised employee" argument remains unchanged.

Even for the former group, they could also argue that they are employed by an NHS trust for each contract and that trust does not have to renew the contract on completion, which blows HMRC's argument that they are employees of the NHS as a whole.

If it were black and white, we wouldn't be arguing about IR35 after 20 years...