Reply to: can other peoples' working practices affect your IR35 status?

[Chugnut]

But the fact is there were 2 plumbers to choose from i.e. it was not a one man limited company.

But it is a one-man limited company. Both plumbers are sub-contractors. It could have just as easily been the one man, and a sub-contractor though. The guy who owns the limited is actually a general builder and probably could have done some of the work himself but since he isn't OFTEC registered in this instance he couldn't.

But the end game is the same; in some circumstances I would have accepted the ROS, in others I wouldn't.

[LisaContractorUmbrella]

I'm actually having some plumbing work done and here's where the example doesn't hold water - pun intended.

Our first plumber (Plumber A) does over half the central heating and pressurised tank, then hurts his knee and looks like he might be laid up for a while. We look at engaging Plumber B therefore effectively invoking the building firm's ROS. However, the building firm and I agree that Plumber B will have to take a while getting up to speed and gaining familiarity with the system so far, so I refuse the ROS. We get on with other jobs for a couple of weeks, and Plumber A is finally well enough to return to work, and completes the system.

If we were just having a couple of rads installed, Plumber B would have been engaged no problem. So for different scenarios, I'm either accepting or revoking a ROS. IR35 or not then.

And as the end client, at no point did I consider either plumber a bloody disguised employee either!!

But the fact is there were 2 plumbers to choose from i.e. it was not a one man limited company.

[Chugnut]

The thinking behind it is that an unfettered ROS indicates that you are running a business rather than acting as a disguised employee. So, to use your example, if you contacted a big firm of plumbers (rather than a man in a van) it would not matter to you who turned up and whether the same guy turned up on the next day provided that the work was guaranteed by the firm that sent either plumber

I'm actually having some plumbing work done and here's where the example doesn't hold water - pun intended.

Our first plumber (Plumber A) does over half the central heating and pressurised tank, then hurts his knee and looks like he might be laid up for a while. We look at engaging Plumber B therefore effectively invoking the building firm's ROS. However, the building firm and I agree that Plumber B will have to take a while getting up to speed and gaining familiarity with the system so far, so I refuse the ROS. We get on with other jobs for a couple of weeks, and Plumber A is finally well enough to return to work, and completes the system.

If we were just having a couple of rads installed, Plumber B would have been engaged no problem. So for different scenarios, I'm either accepting or revoking a ROS. IR35 or not then.

And as the end client, at no point did I consider either plumber a bloody disguised employee either!!

[Chugnut]

Not necessarily - it's about the implied contract which is in force when you go through an IR35 investigation.

So, if the HR person says "we'd never have allowed that to happen..." then that would have quite some bearing on your defence.

I know what you're saying but there's so many variables and it's so full of holes I'd expect my insurer to have them for breakfast. I'd also be tempted to sue the agency & client for including terms in their contract which deliberately negate mine without my consent or knowledge. I'll have some employee rights and back-dated holiday whilst I'm at it, please.

Do they seriously expect us to go to our clients and their HR departments every week and double check our contracts against theirs, and both parties understanding of our working practices on the off-chance that someone's changed their mind since we last did it, so all bets are off?! My contract would be terminated on grounds of being an annoying %*^&#! Surely one of the points of having a contract is to prevent these questions being asked over and over again and remove any such ambiguity?

This fog of uncertainty due to semantics and hair-splitting totally winds me up. What other service industry has to tolerate this rubbish? I can think of many examples where any client would reject a ROS (critical new release of code to Production), and where they would accept one (business as usual development). If the inquiry comes at the wrong time and the HR person gives the answer of the day, I'm found inside IR35? I don't think so.

I have insurance so I don't have to entertain these cretins and their banality.

[LisaContractorUmbrella]

Right, time for a numpty question, but its all in the name of understanding...

Isn't an unfettered ROS a bit of a pipe dream?

Using the oft-quoted plumber example, I'm not sue I would allow a plumber to substitute and/or subcontract to another tradesman at will without at least checking him out for myself. To do so could expose you to all sorts of nasty consequences if things went wrong, and I can't see ClientCo's giving this right out too freely.

Thoughts?

The thinking behind it is that an unfettered ROS indicates that you are running a business rather than acting as a disguised employee. So, to use your example, if you contacted a big firm of plumbers (rather than a man in a van) it would not matter to you who turned up and whether the same guy turned up on the next day provided that the work was guaranteed by the firm that sent either plumber

[TheFaQQer]

Right, time for a numpty question, but its all in the name of understanding...

Isn't an unfettered ROS a bit of a pipe dream?

Using the oft-quoted plumber example, I'm not sue I would allow a plumber to substitute and/or subcontract to another tradesman at will without at least checking him out for myself. To do so could expose you to all sorts of nasty consequences if things went wrong, and I can't see ClientCo's giving this right out too freely.

Thoughts?

Isn't that what insurance is for?

[TheFaQQer]

If yours and the upper level contract both say they WILL accept a substitute, they can stick their HR numpty's opinion where the sun doesn't shine...

Not necessarily - it's about the implied contract which is in force when you go through an IR35 investigation.

So, if the HR person says "we'd never have allowed that to happen..." then that would have quite some bearing on your defence.

[P1mpAndPr0ud]

I would doubt that they would allow, for instance, an unfettered ROS.

Right, time for a numpty question, but its all in the name of understanding...

Isn't an unfettered ROS a bit of a pipe dream?

Using the oft-quoted plumber example, I'm not sue I would allow a plumber to substitute and/or subcontract to another tradesman at will without at least checking him out for myself. To do so could expose you to all sorts of nasty consequences if things went wrong, and I can't see ClientCo's giving this right out too freely.

Thoughts?

[LisaContractorUmbrella]

If yours and the upper level contract both say they WILL accept a substitute, they can stick their HR numpty's opinion where the sun doesn't shine...

Absolutely right but only if the contract reflects reality i.e. the replacement of your choice would be accepted without question by the client and you know someone with your skills and experience who would be available to replace you if necessary.

[Chugnut]

Five years down the line, and the only person they can find works in HR. Do you really expect them to remember that you didn't act like all the others?

As Lisa said, if there is someone from the client saying something like "we wouldn't have accepted a substitute anyway", then there goes that line of defence.

If yours and the upper level contract both say they WILL accept a substitute, they can stick their HR numpty's opinion where the sun doesn't shine...

[TheFaQQer]

But why would they, if your working practices are clearly different? As Cojak says (kind of), if your WP's are markedly different from the others then you would stand out and the client guy would say "No, he's nothing like the rest of them"

Five years down the line, and the only person they can find works in HR. Do you really expect them to remember that you didn't act like all the others?

As Lisa said, if there is someone from the client saying something like "we wouldn't have accepted a substitute anyway", then there goes that line of defence.

[NickFitz]

And she always rejects our Company All Hands meetings. And..."

I once succumbed to temptation and attended a meeting (not All Hands, just All Engineering Hands) addressed by Jerry Yang.

Luckily, I was just recovering from a cold. After a few minutes I developed a tickly cough and, having had the foresight to locate myself at the back of the room, was able to make a discreet exit in search of a glass of water to ease my troubled throat.

Having soothed my throat, I then popped outside for a fag before returning to my desk and getting some actual work done

[NickFitz]

You can't expect them to understand about IR35. If you were to mention it to most people in the UK they would think you were talking about some bad local punk band.

Atrocious Birmingham "reggae" band.

FWIW, when I was at a ClientCorp where the whole department (not just the team I was working with) went off for a picnic in St James' Park, I made a point of asking the guy who was responsible for ensuring that I was fulfilling the terms of my contract if this was billable time. He assured me that, from their perspective, my attendance was an important aspect of my contribution to the project for which I had been hired, as it was essential that I participate in the team "bonding" that this occasion presented.

We then spent the rest of the afternoon lying in the sun, slagging off senior management and throwing the occasional frisbee. However, I drank no alcohol, and afterwards returned to the office and did a couple more hours work (also billable).

All in all, it was one of the more pleasant ways of following my client's business processes whilst using up time that allowed me to leave early on Friday. Though with hindsight, I probably should have got them to put those urgent "bonding" requirements in writing

[Beefy198]

But why would they, if your working practices are clearly different? As Cojak says (kind of), if your WP's are markedly different from the others then you would stand out and the client guy would say "No, he's nothing like the rest of them"

Having said that, IMO, the other contractors' working practices might increase your chances of an investigation - if one guy at your client gets a pull and fails on IR35 it stands to reason that HMRC will then look to all the other contractors at that client and investigate them. That's not to say they would be successful but you can see why they would have a look.

You're assuming that people understand/know about the world of contracting.

They don't.

In an investigation I'm sure "colleagues" and HR would all talk about you like you were a permanent member of staff, about how you attended meetings and ate in the staff canteen etc.

You can't expect them to understand about IR35. If you were to mention it to most people in the UK they would think you were talking about some bad local punk band.

[expat]

But why would they, if your working practices are clearly different? As Cojak says (kind of), if your WP's are markedly different from the others then you would stand out and the client guy would say "No, he's nothing like the rest of them".

Which client guy? HR? If they ask HR, they will probably peg you as an employee because that's all they know and certainly all they want.