CEST Tool - Does your client have the right to decide how the work is done?

[dsc]

It's dumb because my client said "Oh, what if we are an Agile company and we want you to do Agile? We're obviously deciding how the work is done."

I always assumed that Agile is down to the devs to pick up whatever tickets are done and how they are done. Fair enough the backlog is set up by the client, but surely they have to have an input somewhere as otherwise no one would know what to do at all.

[JohntheBike]

I would call that part of the specification, part of the “what”. It could be (ideally, would be) explicitly within the contractual terms. To my mind, it’s akin to security requirements and wouldn’t distinguish between employment and self-employment, rather have a neutral status. However, it is arguable and is certainly not a positive distinction between a supplier and an employee. If the client gives you a detailed process to follow or supervises the implementation, that is a problem. Otherwise, you want maximum autonomy and points of distinction between you, as a supplier, and employees of the same client.

thanks, it was just another scenario to discuss. It hasn't actually happened to me.

[ladymuck]

I would call that part of the specification, part of the “what”. It could be (ideally, would be) explicitly within the contractual terms. To my mind, it’s akin to security requirements and wouldn’t distinguish between employment and self-employment, rather have a neutral status. However, it is arguable and is certainly not a positive distinction between a supplier and an employee. If the client gives you a detailed process to follow or supervises the implementation, that is a problem. Otherwise, you want maximum autonomy and points of distinction between you, as a supplier, and employees of the same client.

Agreed. The Client has a strategic direction for its technology services and as a Supplier you would be expected to deliver within that.

[jamesbrown]

what about this scenario -

the platform you work on has different products automatically bundled in, some of which your client doesn't use. You have experience of some of those products that your client doesn't use and you want to use some of those products to provide the solution your client wants. However, the client forbids you using them, because they are not part of the client's standards.

Any thoughts?

I would call that part of the specification, part of the “what”. It could be (ideally, would be) explicitly within the contractual terms. To my mind, it’s akin to security requirements and wouldn’t distinguish between employment and self-employment, rather have a neutral status. However, it is arguable and is certainly not a positive distinction between a supplier and an employee. If the client gives you a detailed process to follow or supervises the implementation, that is a problem. Otherwise, you want maximum autonomy and points of distinction between you, as a supplier, and employees of the same client.

[JohntheBike]

I see agile as more about organizing the "what" than controlling the "how". You don't get a set of instructions for how to implement solutions. I suppose you could argue it's "how" at a very abstract level, i.e. "how we do business here", but I don't think that's the test; the test is about how a piece of work is completed.

what about this scenario -

the platform you work on has different products automatically bundled in, some of which your client doesn't use. You have experience of some of those products that your client doesn't use and you want to use some of those products to provide the solution your client wants. However, the client forbids you using them, because they are not part of the client's standards.

Any thoughts?

[jamesbrown]

It's dumb because my client said "Oh, what if we are an Agile company and we want you to do Agile? We're obviously deciding how the work is done."

By that logic it's *impossible* for the end client not to decide to some extent how the work is done.

"I need you to install these radiators but install the downstairs ones first because the electrician hasn't finished upstairs yet" = must be a disguised employee

True or not, who knows. It's what the client figured when filling out the tool. Even if HMRC can't win, they don't need to if the Powers That Be higher up in the company say "CEST says no" and force you inside.

I see agile as more about organizing the "what" than controlling the "how". You don't get a set of instructions for how to implement solutions. I suppose you could argue it's "how" at a very abstract level, i.e. "how we do business here", but I don't think that's the test; the test is about how a piece of work is completed.

[FIERCE TANK BATTLE]

It's dumb because my client said "Oh, what if we are an Agile company and we want you to do Agile? We're obviously deciding how the work is done."

By that logic it's *impossible* for the end client not to decide to some extent how the work is done.

"I need you to install these radiators but install the downstairs ones first because the electrician hasn't finished upstairs yet" = must be a disguised employee

True or not, who knows. It's what the client figured when filling out the tool. Even if HMRC can't win, they don't need to if the Powers That Be higher up in the company say "CEST says no" and force you inside.

[jamesbrown]

Sounds a bit like they're having their cake and eating it there, but I'll be putting "No" based on the fact they *could* have one of their permies shadow me or something if they wanted.

Yes. It’s sort of based in reality, but spun in their favour (no big surprise).

[vwdan]

Case law tends to downplay control when the contractor is doing specialist work and the client has insufficient knowledge to control the “how”, although other factors may be positive in that case (not BAU). But if the client does have the capacity to control the how, then it shouldn’t matter whether the work is highly skilled or not.

Sounds a bit like they're having their cake and eating it there, but I'll be putting "No" based on the fact they *could* have one of their permies shadow me or something if they wanted.

[jamesbrown]

Case law tends to downplay control when the contractor is doing specialist work and the client has insufficient knowledge to control the “how”, although other factors may be positive in that case (not BAU). But if the client does have the capacity to control the how, then it shouldn’t matter whether the work is highly skilled or not.

[vwdan]

So, it's IR35 time with current client so I thought I'd better pay a bit more attention to the CEST tool.

One of the questions asked is:

Does your client have the right to decide how the work is done?

This can include your client instructing, guiding or advising the way the task should be completed.

This is not relevant if it is highly skilled work. For example, an airline pilot.

ANSWERS:

x Yes
x No, you solely decide
X No, you and your client agree together
x Not relevant, it is highly skilled work

So this feels like an absolute swizz. It's pretty clear "No" is the best answer, but it seems like HMRC are inserting a nice little "Oh that doesn't count, clause". I'm a consultant - me going in and doing what the client can't is kind of my whole thing.

I don't even know what I'm asking here - does anybody know any legislation or case law it refers to? The HMRC manual is suspiciously devoid of real detail:

ESM0527 - Employment Status Manual - HMRC internal manual - GOV.UK

Though I have to say, having had a play with the tool it certainly doesn't seem it's a silver bullet answer.