Reply to: IR35 exempt still?

[Lucifer Box]

I am trying to gauge if working via a contract with him will be the same sort of contractactual relationship I will have, had I gone via an agency?

This also to access if I am outside of IR35

Who knows? Without seeing your contract it's impossible to say whether or not it's like a typical agency-contractor contract (which are all subject to negotiation and different from each other anyway). The only contract you can realistically worry about is the one you signed (with your mate). I take it he has engaged you as a contractor rather than as an employee?

The key thing if you are challenged by HMCR as regards IR35 is your working pattern rather than what the contract says (although a well worded contract certainly helps). If you are really concerned, get Bauer and Cottrell to review the contract and give you a professional opinion. Don't rely on the opinions of unpaid know-nothing nobodies like us as regards something that could cost you £k's.

[css_jay99]

Obviously not, as most contracts aren't secured by a friend. If the contract you have signed is with your friend, how much cut is he/she taking? Has he/she signed a contract with the client (I don't understand this talk of employers - are you an employee?) or is there another agent in the chain.

Your contract is with whoever's name is at the top of it.

He is a permanent employee at his company, but because they would have needed to bring people in Via agencies to do a job, he managed to convince his Bss that his Ltd company( he used to b a contractor) can do the job for a price thereby cutting out any need for agency + he will be using people who he knows can do the job well. This sort of arangements are quite common in Big Financial Orgs.

So I Guess he(his Ltd Co.) has a contract with his full time employeer (in a capacity as a solution provider) to do the project. He then he has a contract with us to work at his employer's site. there is no agent or anyone else in the chain

So he brought 4 (all specialist in diff areas) in that he knows to do the job. I am sure he is making lotsa money off us but the main thing is Its a working relationship that favours me cos its my first time working on Trading systems + opportunity to learn C #. Rate is about £50 - £100 less than I probably will get

I am trying to gauge if working via a contract with him will be the same sort of contractactual relationship I will have, had I gone via an agency?

This also to access if I am outside of IR35

[Lucifer Box]

Just a quick query on contracts.

If you get a contract via an Agency, Is the contract of service BTW you and the Employer OR you and the Agency ?

Since on my First contract, my contract of service is currently BTW me and my friend that got me the not me and the employer. Is this usually the norm

css_jay99

Obviously not, as most contracts aren't secured by a friend. If the contract you have signed is with your friend, how much cut is he/she taking? Has he/she signed a contract with the client (I don't understand this talk of employers - are you an employee?) or is there another agent in the chain.

Your contract is with whoever's name is at the top of it.

[css_jay99]

Just a quick query on contracts.

If you get a contract via an Agency, Is the contract of service BTW you and the Employer OR you and the Agency ?

Since on my First contract, my contract of service is currently BTW me and my friend that got me the not me and the employer. Is this usually the norm

css_jay99

[meridian]

Only if you tell him which make of brushes to use and in which direction to apply the paint and to what thickness ..

I leave that up to the wife

and if he has to take notice of your instructions to that effect......

Ah. Never had a tradesman take notice yet, doubt one ever will !!!!

[malvolio]

Only if you tell him which make of brushes to use and in which direction to apply the paint and to what thickness and if he has to take notice of your instructions to that effect. The D&C rules as laid out by HMRC can be treated as a reductio ad absurdam in the courts and usually are. Why else the 1250-odd to 3 win/loss ratio?

[Denny]

Is this strictly speaking complete, though?

Contractors are usually expected to do what the client tells them; in my mind, the differential is that although the client tells the contractor what needs to be done, the actual process of how it is done is left up to the contractor.

How does this work with tradesmen? For example, if I hire a builder for some work in my bathroom and then keep him/her on for additional bits and pieces for six months (conservatory here, reroof there....) at what point if any does the builder stop being an independent contractor and become an employee?

When you provide him with coffee and a stale ginger nut, that's when.

Strictly speaking it doesn't matter much whether builders cross the boundaries as much as limited considering nearly all their income is taxed in full anyway, most of them being sole traders - bar a few dispensations for allowable expenses.

I must admit though, I think builders or tradesmen are a great example of how cock eyed IR35 actually is. When I call in a decorator, I tell him what needs doing and he uses my walls to paint on. Isn't that client control too?

[malvolio]

[QUOTE=css_jay99]

And then there's mutuality. If they can send you home without pay because there's nothing for you to do, or if you can take time out of the contract without being paid for it, you're outside.QUOTE]

your view(or IR's) on taking time out cant be right bcos every contractor is allowed some time off. e.g illness/holiday. all that just happens is that he does not get paid for that day. So how can that be a test . I doubt there are contractors out there that get paid when not working

css_jay99

Crap. Contractors don't get holiday, and don't get SSP (at least, not from their clients). If you don't turn up one day, do you invoice your client anyway? I hope not.

If you don't get paid for not working, you pass one half of the MOO test. If you don't get paid when the client has no work for you, you pass the other half.

To use your example, either everyone is inside IR3 or no-one is. Which is it?

[ASB]

Never understood the replacement being a pointer. I know lots and lots of employees who regularly bring in replacements. I used to swap shifts with a mate when I was a shelf stacker at Asda FFS.

So taking a holiday from your client site could be regarded as putting you outside IR35, well outside if you provide a replacement for the period?

Yes. Actual substitution will (1) kill IR35 stone dead.

(1) The problem is that the IR might just try and infer 2 contracts, one before the substitution one after. However case law states that the right to substitution is enough - problem is IR will try and get that out of the notional contract if it didn't happen. If iut did there was no requirement for personal service and you cannot be a deemed employee

[The Lone Gunman]

Similarly, there is case law that says a substitution clause is enough, even if it is never invoked, to take you outside - if you can be replaced, you are hardly going to be offering a contract of personal service.

Never understood the replacement being a pointer. I know lots and lots of employees who regularly bring in replacements. I used to swap shifts with a mate when I was a shelf stacker at Asda FFS.

if you can take time out of the contract without being paid for it, you're outside.

So taking a holiday from your client site could be regarded as putting you outside IR35, well outside if you provide a replacement for the period?

[css_jay99]

[QUOTE=malvolio]And then there's mutuality. If they can send you home without pay because there's nothing for you to do, or if you can take time out of the contract without being paid for it, you're outside.QUOTE]

your view(or IR's) on taking time out cant be right bcos every contractor is allowed some time off. e.g illness/holiday. all that just happens is that he does not get paid for that day. So how can that be a test . I doubt there are contractors out there that get paid when not working

css_jay99

[malvolio]

The IR35 test is Direction and Control - sit at that desk and type in the contets of 40,000 survey forms by next Tuesday in English would cover it. However a professional programmer will be asked to deliver a programme that meets a given specification in a set timescale and left to get on with it. Unless you have to submit every 15 lines of code to a supervisor for checking or something, where is the Direction or Control? Therefore you are probably not caught and can defend yourself agianst anyone that says you are (or at least the Accountax's of this world can on your behalf).

Similarly, there is case law that says a substitution clause is enough, even if it is never invoked, to take you outside - if you can be replaced, you are hardly going to be offering a contract of personal service.

And then there's mutuality. If they can send you home without pay because there's nothing for you to do, or if you can take time out of the contract without being paid for it, you're outside.

It's that simple. Why anyone with any form of professional skills pays IR35 is beyond me.

[meridian]

"...... and in between does whatever I tell him to do".

Is this strictly speaking complete, though?

Contractors are usually expected to do what the client tells them; in my mind, the differential is that although the client tells the contractor what needs to be done, the actual process of how it is done is left up to the contractor.

How does this work with tradesmen? For example, if I hire a builder for some work in my bathroom and then keep him/her on for additional bits and pieces for six months (conservatory here, reroof there....) at what point if any does the builder stop being an independent contractor and become an employee?

[The Master]

As always, when it comes to the crunch it's your working practices that count and no amount of fancy clauses in the contract will change the fact that you are pretty well sunk if HMRC go to your client report and he/she says: "well, css_jay99 turns up at 9am every day, goes home at 5pm and in between does whatever I tell him to do".

[css_jay99]

While on this subject, a query of my own.

I got my current contract via a friend that works at the same place
The company initiated a project, normally the procedure would have been for the company to approach agencies to get contractors in for the JOB

But my friend (who was previously a contractor himself with his own Ltd Co.) managed to tell his employers that he could get people in to do the JOB, so I guess him acting as an Agency/company required to do the Job

My contract has got all that substitution ....stuff. He maintains to me that the contract I have signed with him makes me outside of IR35. Giving all confusing stuff that I have read in the last couple of days, I am not so sure what my position is.

I get a daily rate and contracted to work 8 Hrs a day OR 40 hrs a Week.
To a large extent, I am not controlled of fed how to do my Job but I guess I have deliverables according to deadlines.

If I get behind on my work, I guess I will have to do it in my own time (in/out of employer’s site) and I certainly have not been paid for any overtime either.

Am I caught by IR35?


css_jay99