Reply to: IR35/same company over 3 years

[jamesbrown]

Thank you all for your time and considered opinions on this.

So in essence although length of contract time is not an issue per se it may make me more vulnerable to an investigation.

For a bit more background, I went into the company 2 years ago to help with a transition and transformation piece of work around data centres (my consulting speciality). This went on hold, but while I was on hold someone else in the organisation heard of my skills and needed me to do some discreet pieces. So I have a new line manager (for want of a better title) signing my contract business case within the organisation.

If you were brought in for one piece of work and they moved you around to do something else without a new contract/schedule of work, that implies D&C. Ultimately, you should only be working on the schedule of work that you're contracted to implement. By way of contrast, employees may be shifted around at the whim of their line manager. So, again, length of contract has no bearing, but working practices are important and they can change at any time.

[sibbers]

Thank you all for your time and considered opinions on this.

So in essence although length of contract time is not an issue per se it may make me more vulnerable to an investigation.

For a bit more background, I went into the company 2 years ago to help with a transition and transformation piece of work around data centres (my consulting speciality). This went on hold, but while I was on hold someone else in the organisation heard of my skills and needed me to do some discreet pieces. So I have a new line manager (for want of a better title) signing my contract business case within the organisation.

[jamesbrown]

The length of the contract isn't decisive but it is a huge pointer. There was a prominent case where a contractor was deemed to be outside IR35 for two years and inside for the time after that. Now I'm sure the contractor wouldn't have noticed any difference between the day before the cut-off and the one after; the judge simply made a decision based on the slow integration into the organisation. Many contractors are borderline, and it's a very subjective decision as to whether you're are inside or outside, therefore length of service in itself just makes arguing you're outside that much more difficult.

As always, you have to look at the details of the case. In the case of JLJ, he clearly transitioned from project-based work with discrete deliverables to a rolling contract with no specific projects. That was the decisive factor. Length of contract has no bearing whatsoever, only the change in D&C, which could happen after 3 months or 10 years.

[BlasterBates]

The length of the contract isn't decisive but it is a huge pointer. There was a prominent case where a contractor was deemed to be outside IR35 for two years and inside for the time after that. Now I'm sure the contractor wouldn't have noticed any difference between the day before the cut-off and the one after; the judge simply made a decision based on the slow integration into the organisation. Many contractors are borderline, and it's a very subjective decision as to whether you're are inside or outside, therefore length of service in itself just makes arguing you're outside that much more difficult.

[Contreras]

fwiw I went to work for my permie employer in '05. I contracted for them since '87. So 18 years passed.

Though my circumstances weren't entirely normal. Fixed price stuff, various international business from the same group etc. Nevertheless, in the review the inspector hardly batted an eyelid (might now of course).

There is also a case involving a golf club secretary that is vaguely relevant. That one was in excess of 20 years.

But I do agree with your point. The longer you are somewhere the easier it probably is to slip into a role that is harder to defend.

Even if you manage not to slip into a permie role, HMRC may perceive it initially based on the contract duration meaning an enquiry is more likely, compared with a series of shorter contracts over the same period.

It may also be seen as a more worthy case to pursue aggressively in terms of lost revenue so you'd need a stronger defence to stop the investigation in its tracks.

But the truth is, like salary level and other factors, without collecting the stats. we don't really know.

However, if you were chosen for an IR35 investigation (and no one except HMRC know how people are chosen) ...

I'll bet that the tax investigation insurers have a good idea.

[Wanderer]

This will take me past two years with the same agency/client.
What are the IR35 implications of this?

There aren't any IR35 implications per se.

However, if you were chosen for an IR35 investigation (and no one except HMRC know how people are chosen) then working for a single client for several years is going to mean you are at more risk of losing than someone who has worked at 10 different clients with 10 different contracts and 10 different lots of working conditions to argue over...

I wouldn't worry too much though. Do the due diligence and then get on with your business.

[SteelyDan]

As we keep saying on here with any query re; IR35, it's working practices which are really key; not contract duration.

[northernladuk]

No. The original statement was "This will take me past two years with the same agency/client.
What are the IR35 implications of this?"

The answer, based on IR35 case precedent, is that the length of contract is irrelevant.

Pedant

[ASB]

Can't agree as I have already pointed out. On paper it doesn't but in reality a whole host of issues need to be managed carefully to avoid your status changing.

fwiw I went to work for my permie employer in '05. I contracted for them since '87. So 18 years passed.

Though my circumstances weren't entirely normal. Fixed price stuff, various international business from the same group etc. Nevertheless, in the review the inspector hardly batted an eyelid (might now of course).

There is also a case involving a golf club secretary that is vaguely relevant. That one was in excess of 20 years.

But I do agree with your point. The longer you are somewhere the easier it probably is to slip into a role that is harder to defend.

[DirtyDog]

Absolutely agree but the OP is asking for advice on his situation. Sounds to me like his situation is warrants a modicum of care. I don't think anyone has implied what you say at all. The answer is 'No but.....'

No. The original statement was "This will take me past two years with the same agency/client.
What are the IR35 implications of this?"

The answer, based on IR35 case precedent, is that the length of contract is irrelevant.

[northernladuk]

HMRC have tried before to claim that length of contract has is an indicator of IR35, and lost.

I agree that if you are acting like an employee and viewed like an employee, then chances of failing an investigation are higher, but to imply that just because you have been in a long contract you would be inside IR35 is ridiculous.

Absolutely agree but the OP is asking for advice on his situation. Sounds to me like his situation is warrants a modicum of care. I don't think anyone has implied what you say at all. The answer is 'No but.....'

Don't forget the JLJ case was based on the fact he had been there a long time and they stopped bothering with statements of work and focussing on details of the contract. He slipped quietly from being a contractor outside IR35 to a disguised permie inside IR35. Something that wouldn't have happened had he carried out a number of shorter contracts with different clients.

[MyUserName]

HMRC have tried before to claim that length of contract has is an indicator of IR35, and lost.

I agree that if you are acting like an employee and viewed like an employee, then chances of failing an investigation are higher, but to imply that just because you have been in a long contract you would be inside IR35 is ridiculous.

Yeah, I think that the length by itself is not an issue but it can be an indicator of the role itself being a disguised permie one.

[GB9]

HMRC have tried before to claim that length of contract has is an indicator of IR35, and lost.

I agree that if you are acting like an employee and viewed like an employee, then chances of failing an investigation are higher, but to imply that just because you have been in a long contract you would be inside IR35 is ridiculous.

Broadly agree, however, as NLUK said, the longer you are there the more danger there is of being seen to be part and parcel of the organisation. Just something to watch out for.

[DirtyDog]

Can't agree as I have already pointed out. On paper it doesn't but in reality a whole host of issues need to be managed carefully to avoid your status changing.

HMRC have tried before to claim that length of contract has is an indicator of IR35, and lost.

I agree that if you are acting like an employee and viewed like an employee, then chances of failing an investigation are higher, but to imply that just because you have been in a long contract you would be inside IR35 is ridiculous.

[northernladuk]

None. Length of time is no factor in determining IR35 status.

Can't agree as I have already pointed out. On paper it doesn't but in reality a whole host of issues need to be managed carefully to avoid your status changing.