IR35 Myths

[cojak]

Surely a key thing here is MOO and control over when you work. Eg two very different situations:

1) you work Mon/Tue/Wed for client A, Thu/Fri for client B. This is contractually agreed, and what you always do. Even though you have two clients, potentially with fairly even income, there is still MOO with both, and the clients control when you work.

2) you have agreements with client A and client B of a daily rate, and they'll call on you as/when they need help. Sometimes neither will want you on a given day. Other days both will want you, and you'll likely choose one. Here there's no MOO, and you control when you work.

I agree though that there is a myth believed by some that having 1% of their income from little side bits means the 99% of their income from their main client is suddenly immune to IR35. This is of course not true.

This is what I meant. How many clients will be prepared to play second fiddle? Not many I would think.

[Blert596]

Being sent home from clients for shut down periods or us going on holidays isn't, as some people think, anything to do with MoO.

How does this relate to:

"There will be no requirement for (job role) to work the non-bank holidays between 25th December to 1st Jan. Contractors will be expected to submit timesheets as non-billable for that week. For permanent members of staff it is up to you whether you use your annual leave entitlement or work those days."

[northernladuk]

It's the Time and Materials way our contracts work. We work a day, we get paid a day. MoO is about the expectation of work after the assignment you are in is complete, not during.

[Blert596]

It's the Time and Materials way our contracts work. We work a day, we get paid a day. MoO is about the expectation of work after the assignment you are in is complete, not during.

yes, apologies. I got caught up in the MoO, and the Control aspect, and am torn between thinking that the mail they sent out clearly shows they class me as a contractor not a permie, but also shows a level of control they have over deciding when I can work.

[northernladuk]

yes, apologies. I got caught up in the MoO, and the Control aspect, and am torn between thinking that the mail they sent out clearly shows they class me as a contractor not a permie, but also shows a level of control they have over deciding when I can work.

It's not really a control issue. It's quite OK to say they have control over the work offered. What they can't do is control the way you do it.

Enforced time off is a good indicator though. Save the email and stick it in the defense folder but it's no silver bullet.

[Jolie]

It's not really a control issue. It's quite OK to say they have control over the work offered. What they can't do is control the way you do it.

Enforced time off is a good indicator though. Save the email and stick it in the defense folder but it's no silver bullet.

I am not sure I understand you here, and please forgive me if I haven't.

The whole point of the legislation is to catch people who could be an employee. If the client can control what days you work, then surely that's an indicator.

The fact that in the email, the employee was directed to come in on normal working days, and the contractor was not, is merely a contractural issue. It does not itself indicate that person could not be an employee.

For someone on a day rate, expected to visit the company premises during normal working days unless directed otherwise, demonstrates a level of control. Also, some companies shut down completely over the holiday period, surely this would also be an indicator.

Scenario A

Role: Agile Developer
3 month contract
Hourly rate, paid weekly
9-5, Monday to Friday, or as directed by your manager
Must be on client premises
Report to development manager

Scenario B

Role: Agile Developer
3 month contract
Day rate, hours are flexible, paid monthly
Monday to Friday
Mostly on client site, some work from home
Work assigned by scrum master

Scenario C

Contract to develop a piece of software
3 month contract
Fixed fee for contract, paid on completion
Work anytime from contractors own business premises
Present completed software to the client

Scenario A is almost always going to be inside, B is going to be dubious but mostly caught, C is almost certainly outside.

Again, forgive me if I am way off here.

[TheInvoicer]

I am not sure I understand you here, and please forgive me if I haven't.

The whole point of the legislation is to catch people who could be an employee. If the client can control what days you work, then surely that's an indicator.

The fact that in the email, the employee was directed to come in on normal working days, and the contractor was not, is merely a contractural issue. It does not itself indicate that person could not be an employee.

For someone on a day rate, expected to visit the company premises during normal working days unless directed otherwise, demonstrates a level of control. Also, some companies shut down completely over the holiday period, surely this would also be an indicator.

Scenario A

Role: Agile Developer
3 month contract
Hourly rate, paid weekly
9-5, Monday to Friday, or as directed by your manager
Must be on client premises
Report to development manager

Scenario B

Role: Agile Developer
3 month contract
Day rate, hours are flexible, paid monthly
Monday to Friday
Mostly on client site, some work from home
Work assigned by scrum master

Scenario C

Contract to develop a piece of software
3 month contract
Fixed fee for contract, paid on completion
Work anytime from contractors own business premises
Present completed software to the client

Scenario A is almost always going to be inside, B is going to be dubious but mostly caught, C is almost certainly outside.

Again, forgive me if I am way off here.

Scenarios 3 I don’t think is realistic, there will be requirements, technical standard from client and no doubt progress reporting, demos required etc changes being dictated by client etc etc it’s not to take away the point your making but there will be “control” as such between contract and end software to ensure it’s the product they want to the time they want.
Control is very grey to me like all of this, I’ve been forced on occasions to be onsite etc (looking like A without the manager bit) but the reality of day to day working is they have no control and don’t want it, you lead/deliver how you want etc.



Sent from my iPhone using Tapatalk

[Jolie]

Scenarios 3 I don’t think is realistic, there will be requirements, technical standard from client and no doubt progress reporting, demos required etc changes being dictated by client etc etc

Isn't that the whole point? As a business, who is offering to create software, the client tells you what they want, their requirement, the technical standard etc. My client is not a software house, has no business analysts, so I am in theory an analyst programmer. The only time I am on-site is to work with their staff to look at how they work, what the software needs to achieve and how it should be implemented. There is progress reporting every two weeks, via a video call, where demo's are presented, issues and requirements discussed, but the client has no idea how I do my work, the technology I use and has no control day to day how I complete the work. In fact they are not interested in that, they are only interested in that the end result works, is tested thoroughly and enables their staff to work productively.

Scenario 3 is what my client is asking me to do after April 6th.

it’s not to take away the point your making but there will be “control” as such between contract and end software to ensure it’s the product they want to the time they want.

I wouldn't consider that control. There's an expectation that the client will need to tell you what they want, discuss with you requirements and issues before, during and after the software has been produced. Control is when you are there every day, reporting to someone who is checking on your progress, using their equipment, working to their software standards using technologies they want and the code being checked and verified by them.

Control is very grey to me like all of this, I’ve been forced on occasions to be onsite etc (looking like A without the manager bit) but the reality of day to day working is they have no control and don’t want it, you lead/deliver how you want etc.

Exactly, being on-site occasionally is to be expected, the key is you lead/deliver how you want, which is not control. Being expected to give progress, discuss requirements and demo is also not control.

[northernladuk]

I am not sure I understand you here, and please forgive me if I haven't.

The whole point of the legislation is to catch people who could be an employee. If the client can control what days you work, then surely that's an indicator.

The fact that in the email, the employee was directed to come in on normal working days, and the contractor was not, is merely a contractural issue. It does not itself indicate that person could not be an employee.

For someone on a day rate, expected to visit the company premises during normal working days unless directed otherwise, demonstrates a level of control. Also, some companies shut down completely over the holiday period, surely this would also be an indicator.

Not really. The full term is Supervision, Direction and Control and the definition is below.

Supervision is someone overseeing a person doing work, to ensure that person is doing the work they are required to do and it is being done correctly to the required standard. Supervision can also involve helping the person, where appropriate, in order to develop their skills and knowledge.
Direction is someone making a person do is/her work in a certain way by providing them with instructions, guidance or advice as to how the work must be done. Someone providing direction will often coordinate the how the work is done, as it is being undertaken.
Control is someone dictating what work a person does and how they go about doing that work. Control also includes someone having the power to move the person from one job to another.

You can see none of them particularly mention when. We are a supplier of services to a client on a time and materials basis. When we supply that service is at the whim of the client, how we do is not. You could dictate when a builder comes to start work on your house and when you don't want him there but you can't sit there and tell him how to lay his bricks etc.

Often when to work is dictated by the clients working conditions to which we are a slave. Xmas service protection periods or times the site is open will dictate when and has nothing to do with the way we do it.

So on the whole being told when you can work is at worst a very minor indicator in the scheme of things.

Scenario A

Role: Agile Developer
3 month contract
Hourly rate, paid weekly
9-5, Monday to Friday, or as directed by your manager
Must be on client premises
Report to development manager

Scenario B

Role: Agile Developer
3 month contract
Day rate, hours are flexible, paid monthly
Monday to Friday
Mostly on client site, some work from home
Work assigned by scrum master

Scenario C

Contract to develop a piece of software
3 month contract
Fixed fee for contract, paid on completion
Work anytime from contractors own business premises
Present completed software to the client

Scenario A is almost always going to be inside, B is going to be dubious but mostly caught, C is almost certainly outside.

Again, forgive me if I am way off here.

You aren't way off. It's a very simplistic overview though that doesn't give anything like enough information to be able to make determinations. The devil is in the details. You don't mention the 3 pillars plus working conditions and the like. Broadly it's a start, enough information to call the status, no. I don't agree with A as being almost always though.. but it's too generic to start getting in to the details in this thread.

[WatkinG]

Surely a key thing here is MOO and control over when you work. Eg two very different situations:

1) you work Mon/Tue/Wed for client A, Thu/Fri for client B. This is contractually agreed, and what you always do. Even though you have two clients, potentially with fairly even income, there is still MOO with both, and the clients control when you work.

2) you have agreements with client A and client B of a daily rate, and they'll call on you as/when they need help. Sometimes neither will want you on a given day. Other days both will want you, and you'll likely choose one. Here there's no MOO, and you control when you work.

I agree though that there is a myth believed by some that having 1% of their income from little side bits means the 99% of their income from their main client is suddenly immune to IR35. This is of course not true.

If I had two clients and did the majority of my work for one, how much would I have to do for the other to fall outside of the IR35 trap, if indeed there is a proportion that would remove me at all? Also, would this be viewed as time spent working for each company or for invoice value?