Reply to: Surely the reality is that your average software development contract is INSIDE IR35?

[malvolio]

Ermmm... no.

The acid test that the three criteria are defining is that you are working as an independent business and supplying a service. Your analysis completely misses that point.

[FK1]

The permanent employee is not a disguised contractor. They are a permanent employee.

If you've been brought on not for a specific project but to work along side other people who are permanent employees, where they have a similar skill level to you and are doing a similar role as you, then you are not providing the client with something they do not have themselves, you are a temp, filling in for overcapacity in general day-to-day work.
...
It would also be a far easier one for HMRC to police - just ask the client for the project plan and the end date.

I understand there is no legislation about "a disguised contractor" and everything is around to compare with a permanent employee. However it is nothing about the law, nothing about fairness to compare that way. It it populism.

Again a client could have Agile and a team of not less skilled perms that work remotely.
Maybe not all of them but at least 1 or 2 are always exist that earned that freedom.
"RoS, lack of MoO, lack of D&C" criteria put me outside IR35 but I look like those perms.
And what? It is not me trespassing but them.

If a contractor would have been as principal developer of a core functional it is naturally expected it will be supported by an author as long as possible. The software house does it. In opposite a temp does not.

So I doubt skills and end date are a proper filters. Just as clues maybe.

[jamesbrown]

So it seems that people are saying that according to the spirit of the law, your average (according to my definition) IT contractor is inside IR35, but according the case law (which is the actual law), they are outside?

The perception of what constitutes being inside IR35 is, indeed, different to the reality in many cases. If you can convincingly show that one of the three pillars applies (a not unreasonably fettered RoS, lack of MoO, lack of D&C), then there's a decent chance you're outside. However, I suspect that many BoS contractors that are, perhaps, legitimately outside at present will be unlikely to be deemed outside in future (and won't consider it worthwhile to fight it). In other words, perception is about to become more important than it has been (and reality).

[softwaredever]

Still, it's important to separate between opinion about what it should be and the reality of what case law says.

So it seems that people are saying that according to the spirit of the law, your average (according to my definition) IT contractor is inside IR35, but according the case law (which is the actual law), they are outside?

[jamesbrown]

Others may disagree, but that's my take on it.

Still, it's important to separate between opinion about what it should be and the reality of what case law says.

[WTFH]

So just an existence of someone with the same expert level that work with flexible hours and remotely but on a salary would make me a temp? It is not me a disguised employee but that perm(s) are disguised contractors.

The permanent employee is not a disguised contractor. They are a permanent employee.

If you've been brought on not for a specific project but to work along side other people who are permanent employees, where they have a similar skill level to you and are doing a similar role as you, then you are not providing the client with something they do not have themselves, you are a temp, filling in for overcapacity in general day-to-day work.

Now, there are exceptions, e.g. where you might have been brought in not for a specific contract, but to provide support and train up others so that they can take over in that role, but that would still fit under my idea of there being a project with an end date. In that case, the project end date will be when you hand over your work to others who take it on.


Others may disagree, but that's my take on it. It would also be a far easier one for HMRC to police - just ask the client for the project plan and the end date.

[northernladuk]

The clue is in your question.

The reality is that your average software development contract is inside IR35. Possibly.

Definitely this.

An average one maybe is inside. As a contractor you shouldn't be average. We see so many posts on here of people just working like permies on site, little knowledge of IR35 and many other aspects of contracting it would be easy to say yes, they are likely to be inside just through their own actions. Some of them could easily turn a good outside gig into an inside one.

If you know IR35, do your diligence at the beginning before you start, get a good contract signed and then act like a contractor on site it should be pretty easy to be an outside IR35 developer. Obviously it needs a bit of help from the client as well but you can educate them as well while you are there.

[FK1]

Yes, my take on it is: A contractor is brought in to fulfil a role on a project where the client does not have the required specialist knowledge in house to do so themselves.
If you're brought in to cover maternity leave (for example) or because things are a bit busier and you're joining a team for a few weeks/months to do the same job as permanent staff are currently doing, then you're a temp. If you end up temping for more than a few months, you're effectively a permanent member of staff.

And if you're not sure, ask to see a project plan and ask what the project go live date is. If there isn't one, you're temping.

So just an existence of someone with the same expert level that work with flexible hours and remotely but on a salary would make me a temp? It is not me a disguised employee but that perm(s) are disguised contractors.

[Hobosapien]

The risk with the PS implementation of the off payroll rules is that clients will be pressured into not agreeing that some people are outside IR35, mainly on the "walks like a duck" principle. That is why the support from blanket assessments is misguided and dangerous.

Yup. My PS contract was blanket deemed inside IR35 yet now there is very little work for me to do there is no obligation for client to find me work and no obligation for me to accept whatever they would find.

Though given the choice I'd rather accept being inside IR35 for a higher rate and put as much as possible into 'salary sacrificed' pension pre-tax, as I have been doing. No sleepless nights about retrospective rule changes and hector kicking my backdoor in years down the line.

[malvolio]

The point is not that some people are caught by IR35, but that some people are not caught by IR35. They are the ones that properly understand their working relationship with the client and that have arranged a proper contract that the client agrees with to describe their relationship. At the end of the day, if you can be dropped with zero notice for any reason the client feels appropriate, from no work to non-performance, and cannot demand further work or payment from the client for not working, then you are not an employee and must not be treated like one.

The risk with the PS implementation of the off payroll rules is that clients will be pressured into not agreeing that some people are outside IR35, mainly on the "walks like a duck" principle. That is why the support from blanket assessments is misguided and dangerous.

[Old Greg]

It's true this is the one that I think isn't so clear cut, and I can't say I fully understand the MOO test. So are you implying that because your average IT contract is to work on a specific project, rather than to work for a specific company, there is no MOO?

If a developer is working on a project, and that project is stopped, what will happen? Will the client find other work for them to do and pay them, or will the contractor be stood down with no further work or payment? If the latter, then the contract is outside IR35, according to my understanding. NB the contractor may see a sales opportunity to sell services to the client for another project, which should have a separate statement of work.

[WTFH]

The key thing, as alluded to by others, is whether the contractor is brought in as a specialist or just an additional resource.

Yes, my take on it is: A contractor is brought in to fulfil a role on a project where the client does not have the required specialist knowledge in house to do so themselves.
If you're brought in to cover maternity leave (for example) or because things are a bit busier and you're joining a team for a few weeks/months to do the same job as permanent staff are currently doing, then you're a temp. If you end up temping for more than a few months, you're effectively a permanent member of staff.

And if you're not sure, ask to see a project plan and ask what the project go live date is. If there isn't one, you're temping.

[Lance]

Surely the reality is that your average software development contract is INSIDE IR35?

Not just development. Service desk. 1st and 2nd line support, etc. (grunt jobs)
The key thing, as alluded to by others, is whether the contractor is brought in as a specialist or just an additional resource.
That's the spirit of the law anyway.


However, the spirit of the law is not borne out by the law itself (including the test cases). Moving the burden of determination to the client is a move to make the spirit more applicable, despite the law.

[NotAllThere]

I'm a developer (SAP). I work on contracts where research is required to fulfil the requirements, the solution must be cross-technologies, or where a solution needs to be highly robust. I.e. not the kind of stuff that can be handled by the usual offshore numpties. (In the same way that you can't make a baby in 1 month with 9 women, you can't build a bridge across the Tyne, no matter how many toddlers you have working for you).

[softwaredever]

The clue is in your question.

The reality is that your average software development contract is inside IR35. Possibly.

In my field (web application development in London) literally every contract I see advertised or hear about from agencies is of the type I described, as are ads for mobile and native app development that I come across. My experience chimes with the OP here.

https://www.contractoruk.com/forums/...they-lose.html

Though it's true my focus may be narrow and things are different in different areas (perhaps security?).