Reply to: Have I dug my own grave?

[Taita]

IR35 is de-facto repealed, there is more chance of you being hit by lightining than being investigated for IR35.



Anyone who tells you different is likely to be selling something IR35 related.

HM Revenue & Customs: Employment status

Ask Lester Piggott about the chances of being hit by lightning!:

[Jessica@WhiteFieldTax]

Investment banks are funny ones. The offices in London are usually so large that items like gyms and canteens are usually outsourced and available for anyone, employees, contractors, guests and so on.

In my limited experience they are also often landlord delivered for whole site rather than a particular tenant.

[Jessica@WhiteFieldTax]

D&C
Well there is a project manager but I'm pretty much left to get on with things myself.
I also work one day a week from home. Something which does concern me is an email I was copied on last week which stated everyone should be in the office between 9-5.30. That was sent by the department head. I'm tempted just to ignore it. So not the strongest defence in the world.

Actually I think that is a useful piece of evidence. If there is no sanction for not doing so, and your arrangements are at variance with direct staff, it shows a clear D&C difference between you and direct staff. Question is, can you make the difference in D&C into a case for absence of D&C

[LisaContractorUmbrella]

Try the quoted version - works here.

Got it thanks The article you refer to uses, as its basis, the Ready Mixed concrete case (from 1968) but it's been developed over the years as more and more employment status cases arrive in the Courts. Of course HMRC will use cases which support their position but the basic premise that was set in Ready Mixed Concrete will typically form the base for their argument and that is widely accepted as being the authority.

[TheCyclingProgrammer]

Sorry - link seems to be broken

Try the quoted version - works here.

[LisaContractorUmbrella]

I don't find that to be particularly clear or guiding but if I am interpreting it correctly it appears to be at odds with this guidance:

IR35:Substitution, control and mutuality of obligation :: Contractor UK

Am I misunderstanding it or is this just another case of HMRC interpreting the law in their favour?

Sorry - link seems to be broken

[TheCyclingProgrammer]

HMRC's opinion on MOO with relevant case law [url=http://www.hmrc.gov.uk/manuals/esmmanual/esm0543.htm]ESM0543 - Guide to determining status: mutuality of obligation

I don't find that to be particularly clear or guiding but if I am interpreting it correctly it appears to be at odds with this guidance:

http://www.contractoruk.com/ir35_reading/ir35_substitution_control_mutuality_of_obligation. html

Am I misunderstanding it or is this just another case of HMRC interpreting the law in their favour?

[LisaContractorUmbrella]

MOO
I’m not obliged to accept any new work from the client. I'm currently working on a project. The client can tell me not to come in and work so I can't invoice. I was talking to someone today in the office who said contractors are told not to work for 2 weeks a year.

D&C
I was speaking to the project manager today. I am free to come and go as I wish as long as the work gets done. He doesn't set me objectives. We have a daily sprint meeting where he records what I'm working on and does some planning.
If he was not there the work would still get done, maybe just a little slower.

I feel I am outside of IR35 based on this and if lightning does strike I will have a good defence. Plus I can keep using the gym

HMRC's opinion on MOO with relevant case law ESM0543 - Guide to determining status: mutuality of obligation

With regard to D&C - were you engaged to work on a single project or do you work on projects as directed by the project manager?

[TheCyclingProgrammer]

WTFS.

My clients don't contract me to be a bum on a seat for x months, doing whatever work they see fit. They engage me to perform a specific package of work or on a single project. The contract will normally specify an expected end date but that's more a reflection of the clients maximum budget and how much of my time they are willing to pay for.

In short, if the project finishes early for some reason - took less time than expected, budget dries up, project cancelled etc. then for all intents and purposes the contract is over.

So to me, lack of MOO means the client not being obliged to offer me work when the job is finished or keep paying me and I'm not obliged to take on new work whether that's an extension of the original schedule or a new schedule for a brand new project.

My contract also states that even within an ongoing project, the client isn't obliged to pay me if there is no work available on a given day or other temporary reason - e.g. there is a delay on the project or it's put on hold for a week or something. Not getting work and not getting paid until the project resumes to me also shows lack of MOO and is an excellent pointer to being outside IR35, as an employee would still be expected to turn up and get paid even if there was nothing to do.

[TheFaQQer]

If you mean one project comes to an end before the contract is up, and the client then finds something else for you to do, in that case their desire to keep you busy is positive evidence of MOO. Are you arguing that if your contract terms allow you to walk away without notice when the work changes, that constitutes lack of MOO? I suspect few contractors actually have contracts that specify they can walk away if the project they are working on changes.

To me lack of MOO means you say to client: "I have finished this bit of work early, lucky you this is coming in under budget, I'm off to do some fishing now, feel free to contact me in future if you have anything else you want to use me for." (In the real world, virtually every contractor and client would allow the contract to continue to the end in this scenario, i.e. in reality MOO nearly always exists.)

My contract says

nor does this agreement confer any obligation upon any party to provide or accept further work during the course of this agreement or following the Termination Date

which I interpret as saying that if the specific work that I am engaged to do ends, I can walk away if they offer anything else which I don't fancy doing. With this client, I was engaged to do some fixes in one area, and when I finished that bit, the client said "since that works now, would you like to stay around and have a look at the next process and fix that one as well?", which I did. I could have said no and walked away, if I'd wanted to, though.

[malvolio]

...snip...
(Or have I been brainwashed into believing HMRC definition of MOO?)

An irreducible minimum of Mutuality of Obligation = The Client is not obliged to offer you work and you are not obliged to accept it. If you are a permie and the work dries up (or, as in one classic case, the servers die and nobody can work) you will still get paid. If you are a contractor you won't: if you are paid then the MoO is not an irreducible minimum.

You are contracted to deliver "stuff", be it product, deliverable or, in my case, consultancy in a given area of expertise. Once that's done, that's it: doing different stuff or more of the same stuff will require a new contractual schedule which, of course, both sides are at liberty to refuse.

Don't conflate the two. That way lies madness...

[IR35 Avoider]

From everything the OP has said, it sounds like he isn't obliged to accept any new work from his client (so lack of MOO)

Don't think I agree with your understanding of MOO. What exactly do you mean by "new work".

If you mean a contract extension, no contractor is obliged to accept that, so that can't be what you mean, as then every contractor would be outside IR35.

If you mean one project comes to an end before the contract is up, and the client then finds something else for you to do, in that case their desire to keep you busy is positive evidence of MOO. Are you arguing that if your contract terms allow you to walk away without notice when the work changes, that constitutes lack of MOO? I suspect few contractors actually have contracts that specify they can walk away if the project they are working on changes.

To me lack of MOO means you say to client: "I have finished this bit of work early, lucky you this is coming in under budget, I'm off to do some fishing now, feel free to contact me in future if you have anything else you want to use me for." (In the real world, virtually every contractor and client would allow the contract to continue to the end in this scenario, i.e. in reality MOO nearly always exists.)

If both contractor and client go into a contract with the intention that the number of days worked will be identical or very close to the number of working days in the contract period, regardless of how the workload pans out, then that is MOO in action, I think.

(Or have I been brainwashed into believing HMRC definition of MOO?)

[Angrybunny]

[I]You need to understand a little more about mutuality of obligation - the duration of the contract is irrelevant - it's whether or not they are obliged to offer you work and whether you are obliged to accept it.[/I]

It's difficult to make a judgement without all the facts but my gut feeling is that the contract has been written to put you outside IR35 but your working practices would put you inside or, at the very least, borderline.

Going to the company gym and canteen would indicate that you had integrated into the workforce and would be an indicator but not a determining factor in an IR35 investigation

MOO
I’m not obliged to accept any new work from the client. I'm currently working on a project. The client can tell me not to come in and work so I can't invoice. I was talking to someone today in the office who said contractors are told not to work for 2 weeks a year.

D&C
I was speaking to the project manager today. I am free to come and go as I wish as long as the work gets done. He doesn't set me objectives. We have a daily sprint meeting where he records what I'm working on and does some planning.
If he was not there the work would still get done, maybe just a little slower.

I feel I am outside of IR35 based on this and if lightning does strike I will have a good defence. Plus I can keep using the gym

[Sausage Surprise]

I started contracting last year and had my contract checked for IR35 and it's considered outside.

However I stupidly joined the staff gym a couple of months ago and have been using the staff canteen.
I guess after so many years of being in a permie role I didn't think about IR35.

I think I'm going to be able to answer my own question here. Is it too late to cancel this gym membership and stop using the canteen to avoid this causing trouble further down the line?

I'm guessing it wouldn't go down too well in an IR35 investigation if I said - 'Well I started using the gym but then I realised I wasn't really an employee so cancelled.'

Best one for a while

[Project Monkey]

IR35 is de-facto repealed, there is more chance of you being hit by lightining than being investigated for IR35.



Anyone who tells you different is likely to be selling something IR35 related.

This is not true and I've had some IR35 t-shirts made up to prove it. Anyone interested?