General Advice On IR35

[TheFaQQer]

Leaving do's and goodbye drinks when the contract ends. Very naff and implies you've left an organisation (which you never joined in the first place) rather than finishing off a series of deliverables outlined on your SoWs and hope to come back again when the work picks up. By all means take advantage if you actually are an IR35 inclusive though, but avoid if not.

When a contractor left my current engagement, people had a leaving card for him and a collection.

What's considered the "best form" for rejecting such an offer?

[Denny]

Some examples:-

1) Do contractors have to adhere to a dress code? Anything in the affirmative means you need to turn the contract down. Doesn't mean you can't wear a suit, just that you don't have to - IR35 pointer

2) What times are contractors required to work? Any specific times are bad. If they say they don't care but need you to do X number of hours, that is OK. If they say you just need to meet the requirements within the deadline, that is good.

3) Do I have access to the staff car park/canteen/gym etc? Anything in the affirmative again is bad.

Basically, anything that is either a perk of being a permie, or a restriction placed on permies is bad. I'm sure you get the idea.

I would qualify no 2 and 3.

It certainly would be a problem if you were expected to put in a certain number of hours per day. That implies MOO is there. If the contract states you are being paid an hourly rate then this certainly should not specify the numbers of hours per day and should only imply that you will only be paid for the hours worked to finish the job by the deadline.

It is hard not to have access to the staff canteen, gym and so on if the procurement team have you listed as a contractor with similar perks to the permie staff. The important thing is not to take advantage of them, making it clear that not all contractors are the same in practice and so can't be lumped together as if they are. The important thing about exemption is your commercial relationship with the client (your own client, not the corporate body as a whole). It's your own site working practices as negotiated that matters, not what the procurement team dictated to the EB when drawing up their own contract with them. After all, you have no knowledge of these terms nor do you have access to them. Therefore, they are largely irrelevant but will be used by the IR as a loud drum to bang during an investigation. Just make sure you are well covered with good, honest client testimony about your actual not expected on site working practices. (Last came from Qdos, as I had similar concerns about this).

[Cowboy Bob]

So you would not expect a dress code? I thought that would be expected for a lot of contracting jobs, like big lawyers etc etc (not being a lawyer but at the firm).
And ask what questions? Im new and not starting contracting till Jan/Feb so need to get as much info as poss

Some examples:-

1) Do contractors have to adhere to a dress code? Anything in the affirmative means you need to turn the contract down. Doesn't mean you can't wear a suit, just that you don't have to - IR35 pointer

2) What times are contractors required to work? Any specific times are bad. If they say they don't care but need you to do X number of hours, that is OK. If they say you just need to meet the requirements within the deadline, that is good.

3) Do I have access to the staff car park/canteen/gym etc? Anything in the affirmative again is bad.

Basically, anything that is either a perk of being a permie, or a restriction placed on permies is bad. I'm sure you get the idea.

[Denny]

Any kind of dress code for contractors sends up a big red flag with me for example.

Good thing you're not going for a contract as Santa Claus then.

The big red flags for me are:

(1) How do you see yourself fitting into the team?

To me this implies that I would have to work to similar hours and terms set by the programme manager (eeek, client control!) in the interests in conformity and fairness (can't have someone walking out at 3pm to work at home office if the rest are glued to their office chairs until after 6pm because on site hours are specified in thier contracts).

Don't mind if I'm asked:

(2) how do you operate when working with or in a team (which is deliverable focused and doesn't imply conformity to a culture or imply that I form part of that organisation's programme team). Carefully questioning required here whichever way its presented, in case they ask the second but mean the first.

Other red flags:

(3) Before we make an offer, do you have any holidays planned?

IR35 exempt answer: This question doesn't apply to me. In any event, I've always fitted my holidays around my deliverables and usually take these between contracts like any business. (Strong pointer to irrelevance of question, but politely given).

(What I mean is: the heck has it got to do with you, I do have rights of substitution you know).

IR35 inclusive answer: Er... I would like to take two weeks off in July to go to Spain, if I may.

(4) Would you consider taking the role permanently?

IR35 exempt answer: I'm in business on my own account and have been for x years. I don't have plans to wind down my company.

(What I mean is: F*** Off you corporate clone).

On site red flags:

Office with your own permanent desk and computer set up or worst still, name on the door.
Forms to fill in on holiday plans whereabouts charts.
Your name appears on the org chart with a client given job title (which should never appear on your EBs contract with you either).
Having to hire or manage suppliers/staff that are not hired through your own company.

OK forms - Confidentiality Agreements, conforming to Health and Safety codes whilst on site (carefully crossing out any generic reference to [client name staff] on both).

Red flags to avoid:

Taking advantage of the staff canteen regularly, unless invited as part of a meeting.

Ditto sports club and other staff facilities.

Paid for parties and other staff events.

Team building awaydays with no particular deliverable purpose except team bonding.

General weekly status meetings when you have no 'actions' outstanding, therefore no real purpose to be there. You can always read the report afterwards if your job requires you to know what's going on.

Going out the client's other clients and having to introduce yourself as [name, from client company]. Always insist on using your own company or trade name and tell the visitor you are seeing that you are [name] from [own company] visiting on [client name's behalf].

Leaving do's and goodbye drinks when the contract ends. Very naff and implies you've left an organisation (which you never joined in the first place) rather than finishing off a series of deliverables outlined on your SoWs and hope to come back again when the work picks up. By all means take advantage if you actually are an IR35 inclusive though, but avoid if not. In any event it's quite hard to come back again, if you were bought a leaving pressie and drinks only two months ago but the work picks up again, so there's a psychological advantage to ending the contract discretely without any fuss or long goodbyes because those you worked alongside won't expect you back - at least not so soon in order to justify the fuss they made of you. Not good for business. By all means thank the client personally if he sends out an e-mail telling everyone you are going, but don't encourage that edge of finality yourself by sending out ta ta invites for drinks. The time for any IR35 exempter to get their wallet or purse out to do some serious smoozing is when they are trying to drum up new business not when the current business comes to an end.

[malvolio]

It's been answered, very recently. Go search for MOO, D&C and RoS and you should find my turgid prose.

Dress code, BTW is a no-no. If you haven't got the wit to turn up dressed appropriately (which by default is slightly better than the client's permie staff) then you're in the wrong job. Wear the whistle on day one and work from there.

[Mervalous]

Personally, I make sure that my contract and working conditions are outside of the IR35 regulations, and then act accordingly.

I get my contracts reviewed by a set of specialist contract lawyers (Bauer & Cottrell - excellent BTW). As for working conditions, well I'd just turn it down if it was obvious that the conditions were not IR35 compatible - it's usually easy to tell if you ask the right questions in the "have you got any questions?" phase of the interview. Any kind of dress code for contractors sends up a big red flag with me for example.

So you would not expect a dress code? I thought that would be expected for a lot of contracting jobs, like big lawyers etc etc (not being a lawyer but at the firm).
And ask what questions? Im new and not starting contracting till Jan/Feb so need to get as much info as poss

[Cowboy Bob]

Does the contractor decide this themselves and act accordingly (i.e. low salary high dividends)? Does everyone just act like they fall inside IR35 until they are caught not to be?

Personally, I make sure that my contract and working conditions are outside of the IR35 regulations, and then act accordingly.

I get my contracts reviewed by a set of specialist contract lawyers (Bauer & Cottrell - excellent BTW). As for working conditions, well I'd just turn it down if it was obvious that the conditions were not IR35 compatible - it's usually easy to tell if you ask the right questions in the "have you got any questions?" phase of the interview. Any kind of dress code for contractors sends up a big red flag with me for example.

[Cowboy Bob]

Surely thats yes to the former in point one and yes to the latter in point two

Oops, yes, I see you spotted the deliberate mistake

[themistry]

Thanks for all the responses guys.

So, with a better understanding of how to test when you fall inside or outside of IR35, who is it that actually deems if you are inside or outside IR35?

Does the contractor decide this themselves and act accordingly (i.e. low salary high dividends)? Does everyone just act like they fall inside IR35 until they are caught not to be?

Any help appreciated.

Kind regards
TM

[Sockpuppet]

That is not correct. There are 2 main pointers towards IR35 status and if at least one of them is in place then you are likely to win any investigation:-

1) Mutuality of Obligation - If there is no work for you do you go home and not get paid, or do you turn up and get paid anyway?
2) Direction and Control - Does the client tell you precisely what to do, or do they give you a set of requirements and let you get on with it?

If you answer yes to the former points in the above two questions, you are not inside IR35.

Surely thats yes to the former in point one and yes to the latter in point two

[boredsenseless]

That is not correct. There are 2 main pointers towards IR35 status and if at least one of them is in place then you are likely to win any investigation:-

1) Mutuality of Obligation - If there is no work for you do you go home and not get paid, or do you turn up and get paid anyway?
2) Direction and Control - Does the client tell you precisely what to do, or do they give you a set of requirements and let you get on with it?

If you answer yes to the former points in the above two questions, you are not inside IR35.

Not strictly true but it is a very good indicator the actual test for IR35 is so undefined even HMRC do not understand it.

[Cowboy Bob]

I understand that basically, if I form a Ltd company to act as an intermediary, practically any contract I get will fall under IR35, which I assume is the same for everyone here.

That is not correct. There are 2 main pointers towards IR35 status and if at least one of them is in place then you are likely to win any investigation:-

1) Mutuality of Obligation - If there is no work for you do you go home and not get paid, or do you turn up and get paid anyway?
2) Direction and Control - Does the client tell you precisely what to do, or do they give you a set of requirements and let you get on with it?

If you answer yes to the former points in the above two questions, you are not inside IR35.

[Nixon Williams]

I understand that basically, if I form a Ltd company to act as an intermediary, practically any contract I get will fall under IR35, which I assume is the same for everyone here.

Not true - each contract and the way that you work and interact with the client is what matters.

[themistry]

Hi guys,

I've been reading the articles on the main site and searching the forums for posts and have a few questions.

I understand that basically, if I form a Ltd company to act as an intermediary, practically any contract I get will fall under IR35, which I assume is the same for everyone here.

So, how is it the main recommendation is still to continue taking a small/average wage and the rest as dividends? I thought IR35 was meant to stop this practice? Is it simply a case of do it till you are caught, or more likely am I missing something a little more fine grained?

Thanks for any advice and/or links to relevant info

TM