Reply to: Bauer & Cottrell contract review - suggests I will never be outside IR35?!

[jamesbrown]

I agree, but it seems HMRC do not. At least, not any more. This has today been concluded following a questionnaire that the hiring manager kindly filled out. Even though in said questionnaire, he agreed that I have a ROS, he is not under any obligation to give me work (no work no pay) and he cannot tell me how to do the work, I am still inside. Probably has something to do with the fact that we agree mutually where I will do the work - I cannot wake up in the morning and decide to work from home for instance, unless agreed. This is due to the nature of the work though, as I am there to do some desktop "end user" support so they need a certain number of people on site. If there aren't enough people, then I need to go in. To me, that's reasonable as the work I've been brought in to do dictates that and I am professional enough to understand when and where I am needed, but I guess it could also be construed as the client having control over me. It also has something to do with my not having been brought in to work on a specific project. My contract states that I'm doing support work, no mention of a project. This is apparently a big no no. I thought that the fact that I am actually backfilling for other staff who are working on a project and I am only there until that project is complete and the project is paying for me, would count in my favour, but no. (I am actually working on the project as well as it turns out, but the contract states that I'm doing support) It just means that I am more like an employee because I'm doing the same job as other permies.

I don't know, I am disappointed with the result and it does go against everything I understood to be the case from a couple of years ago, but I have to suck it up. It does mean that most subsequent contracts I have also will almost certainly be inside too, in the eyes of B&C and presumably therefore HMRC. All the items that apparently put me inside here are normally present in just about any support contract I do. I guess I have to avoid support and do projects only.

You seem to be missing that B&C are offering an opinion (classification) that is filtered by their view of risk. It doesn't mean that you would definitely lose an IR35 investigation, only that you are not in a sufficiently strong position to warrant a "pass" according to their terms of review. It's up to you what you do with this information, and you can seek a second review if you wish (which could result in a pass; this is always possible given the subjectivity involved and the differences in risk tolerance between reviewers). However, if the contract and working practices have been failed by one reviewer, you shouldn't expect a confident pass by another reviewer, especially when there's a good chance that D&C is involved.

Nothing has changed in the way IR35 is judged against case law. This is likely to change in April 2017, but nothing has changed recently. So your understanding of IR35 may well be correct, but your confusion lies with how a particular review service (and reviewer) maps a set of risks to a "pass" or "fail". Of course, I haven't seen your contract or working practices, and it may be that most or all reviewers would consider your working practices inside.

[zippy.mini]

IMHO even if you are a temporary resource, you can be outside IR35 if :

1) You have a genuine Right of Substitution (RoS)
2) You have right to refuse work which is offered and the client is not obliged to offer any work even within your current assignment. No work no pay
3) Client does not have the right to tell you "how" to do your job.

As others have stated, most projects have mixture of staff & contractors. It is the details of your contract and working practices which sets you aside from permies, not what work you do!

I agree, but it seems HMRC do not. At least, not any more. This has today been concluded following a questionnaire that the hiring manager kindly filled out. Even though in said questionnaire, he agreed that I have a ROS, he is not under any obligation to give me work (no work no pay) and he cannot tell me how to do the work, I am still inside. Probably has something to do with the fact that we agree mutually where I will do the work - I cannot wake up in the morning and decide to work from home for instance, unless agreed. This is due to the nature of the work though, as I am there to do some desktop "end user" support so they need a certain number of people on site. If there aren't enough people, then I need to go in. To me, that's reasonable as the work I've been brought in to do dictates that and I am professional enough to understand when and where I am needed, but I guess it could also be construed as the client having control over me. It also has something to do with my not having been brought in to work on a specific project. My contract states that I'm doing support work, no mention of a project. This is apparently a big no no. I thought that the fact that I am actually backfilling for other staff who are working on a project and I am only there until that project is complete and the project is paying for me, would count in my favour, but no. (I am actually working on the project as well as it turns out, but the contract states that I'm doing support) It just means that I am more like an employee because I'm doing the same job as other permies.

I don't know, I am disappointed with the result and it does go against everything I understood to be the case from a couple of years ago, but I have to suck it up. It does mean that most subsequent contracts I have also will almost certainly be inside too, in the eyes of B&C and presumably therefore HMRC. All the items that apparently put me inside here are normally present in just about any support contract I do. I guess I have to avoid support and do projects only.

[eazy]

Other Pointers

IMHO even if you are a temporary resource, you can be outside IR35 if :

1) You have a genuine Right of Substitution (RoS)
2) You have right to refuse work which is offered and the client is not obliged to offer any work even within your current assignment. No work no pay
3) Client does not have the right to tell you "how" to do your job.

As others have stated, most projects have mixture of staff & contractors. It is the details of your contract and working practices which sets you aside from permies, not what work you do!

[nomoregantcharts]

What was the outcome of this in the end? Did you find a way to adjust the working practices so that you are outside IR35?

[d000hg]

I wasn't under the impression that being a "short term additional resource" was a red flag for IR35 in the first place. Is it? Because I'm sure loads of software developers fit this pattern, much as we ideally would like to contracted for specific deliverables.

[sociopath]

It all depends on whether or not the review was done purely on working practices or purely on the contract or a combination of both. A contract review alone may not be representative of the true IR35 position as some contracts are written in such a way that they'll pass a review.

You could consider an individual brought in to support a project. They will have specific requirements to deliver and project will have an end date. Then there is the individual brought in to support a clients central team with no specific project or end date (other than contract end date). The latter would be more difficult to argue is outside IR35.

[sociopath]

A representative of your client (line manager) must tell a representative of your company (you) what they have hired your company (and it's representatives) to do. You can't just go on site and start guessing what you have to do, so there's must be more to this that would put you inside. Being told what the expected end result of your work needs to look like is not direction (control). Being told how to get to the end result is. As I say, we don't really have the full picture here so B&C will have the final word and then you can feed back anything you are not sure of in CUK (once you have attempted to clarify with B&C).

IR35, simplez (comparison website reference).

Fair point. However the way the Ops post reads is that they have work other than a specific project to do and that work is not agreed up front before attending site.

[LisaContractorUmbrella]

This is my point really. I don't know a single contractor in an infrastructure/support role that ISN'T in this situation. And yet until now I've not been inside with previous reviews. How does one get oneself outside IR35 if this is the current definition of inside?
i haven't just "changed my lunch hour" but that's beside the point - there are support guys out there working outside ir35 who have to be on site at specific times of the day to cover shifts - a few years ago, this too would not automatically put you inside (I've worked those shifts and have the contract reviews to prove it), but from what you say and what I was told yesterday, it would now?

It all depends on whether or not the review was done purely on working practices or purely on the contract or a combination of both. A contract review alone may not be representative of the true IR35 position as some contracts are written in such a way that they'll pass a review.

[Kate Cottrell]

Bauer & Cottrell Contract Review

Exactly...
I have emailed for clarification as I only had the conversation on the phone yesterday and would like it all in writing.

Hello zippy mini

I have just sent you an email setting out the detail of your case and the current position. I look forward to hearing from you on the outstanding points please.

Kate Cottrell
Bauer & Cottrell

[AntonioDJCA]

My intention for posting this was not to diss B&C, far from it. It was purely to discuss what I was told over the phone yesterday with others. To be honest, the person I spoke to over there really wanted to close the review there and then but I requested an idea of what I may be able to do to change the status and said I wanted a chance to try to make that change. She agreed.
But there are many contracts out there where the requested change cannot be made - ie any support role. The only option I was given I think, was to get clarification from the hiring manager that I am here to work on a specific project only. Whilst I can probably get this clarification in this instance (my contract doesn't mention a project currently, it just says services, but I am here because of a specific project), it doesn't change the fact that any support role where a contractor is brought in to temporarily bolster the workforce would automatically be deemed inside based on what I have been told.
And that is contrary to my previous understanding. It takes nothing else into account - MoO, RoS, insurances etc is all apparently irrelevant. Its due to direction and control because the manager has the right to say what work they want done. They may or may not have the right to decide how, where or when, but it seems that them having the right to say What, is enough! Don't managers say What needs doing in every contract?! I'm simply confused.com and wanted to discuss it.

I don't mind being inside on a particular contract, what I do mind is that it feels now like every contract I will ever get will probably be inside.

A representative of your client (line manager) must tell a representative of your company (you) what they have hired your company (and it's representatives) to do. You can't just go on site and start guessing what you have to do, so there's must be more to this that would put you inside. Being told what the expected end result of your work needs to look like is not direction (control). Being told how to get to the end result is. As I say, we don't really have the full picture here so B&C will have the final word and then you can feed back anything you are not sure of in CUK (once you have attempted to clarify with B&C).

IR35, simplez (comparison website reference).

[zippy.mini]

My intention for posting this was not to diss B&C, far from it. It was purely to discuss what I was told over the phone yesterday with others. To be honest, the person I spoke to over there really wanted to close the review there and then but I requested an idea of what I may be able to do to change the status and said I wanted a chance to try to make that change. She agreed.
But there are many contracts out there where the requested change cannot be made - ie any support role. The only option I was given I think, was to get clarification from the hiring manager that I am here to work on a specific project only. Whilst I can probably get this clarification in this instance (my contract doesn't mention a project currently, it just says services, but I am here because of a specific project), it doesn't change the fact that any support role where a contractor is brought in to temporarily bolster the workforce would automatically be deemed inside based on what I have been told.
And that is contrary to my previous understanding. It takes nothing else into account - MoO, RoS, insurances etc is all apparently irrelevant. Its due to direction and control because the manager has the right to say what work they want done. They may or may not have the right to decide how, where or when, but it seems that them having the right to say What, is enough! Don't managers say What needs doing in every contract?! I'm simply confused.com and wanted to discuss it.

I don't mind being inside on a particular contract, what I do mind is that it feels now like every contract I will ever get will probably be inside.

[AntonioDJCA]

I have all my contracts reviewed by B&C and have had great service.
Just to correct you, they will negotiate with the agency on their Contract Review package (what you would call their lowest?).

Strangely, you had to pay extra on the Gaurdian for them to negotiate but dont now.

b7C can only go on what the OP has told them. Im pretty sure they would only have said he \ she will always be inside IR35 if the working practices remain unchanged on every job.

After seeing Kate's response on here and noting that the case has not been closed yet, I must apologise for jumping to the conclusion that they only gave the OP some brief information over the phone (which is why I kept on saying it's just not enough) as his review. Sounds like they provide a comprehensive service (your statement seems to confirm this), so I am confident they will help OP get to the bottom of why they deem him to be inside and make reasonable recommendations based on that.

Look forward to hearing how this develops Zippy, and please remember that B&C are there to provide you with professional services, of which the outcome may not always be favourable (no one is happy when their accountant says you must pay VAT this month, but that shouldn't be a cause for going to a forum, same principal here). Before following this up it would be best discussed (and closed) with B&C as anything we say here would put pressure on them one way or another so not ideal to publicize before the case is closed.

[zippy.mini]

And software engineers, project managers, everybody really.

Exactly...
I have emailed for clarification as I only had the conversation on the phone yesterday and would like it all in writing.

[VectraMan]

This is my point really. I don't know a single contractor in an infrastructure/support role that ISN'T in this situation.

And software engineers, project managers, everybody really.

[zippy.mini]

From everything that's been said by the OP, IMHO he would fall inside IR35 as he is working alongside and doing exactly the same job as the permanent staff under the same basic management controls - I am not sure that changing your lunch hour would count for very much in an IR35 investigation.

This is my point really. I don't know a single contractor in an infrastructure/support role that ISN'T in this situation. And yet until now I've not been inside with previous reviews. How does one get oneself outside IR35 if this is the current definition of inside?
i haven't just "changed my lunch hour" but that's beside the point - there are support guys out there working outside ir35 who have to be on site at specific times of the day to cover shifts - a few years ago, this too would not automatically put you inside (I've worked those shifts and have the contract reviews to prove it), but from what you say and what I was told yesterday, it would now?