Reply to: Advice Please

[hyperD]

Well, AIUI, the IR can go as far back as they want once they start an investigation (until 2001 IR35?).

I had the VAT man phone me for a precautionary "introduction" 2 years ago and light-heartedly mention a few bits of hardware in the breakdown of my expenses...sounded like a dodgery old fool but in actual fact was as sharp as nails.

Sadly, the fact is, unless you are truly B2B you cannot spend IR35 money (approx 20% of your turnover) unless you are 100% certain.

However, the chances of an investigation are statistically low. BUT you cannot say after X years I'm OK.

You can say, however, once you vote Tory, IR35 will be abolished (or you used to... - not sure now...)

[Diestl]

Is there a time limit contracts can be investigated for? i.e. if i do a 6 months contract in 2006 could IR still look at it in 2016? The reason I ask is I would try and be outside IR35 on all my contracts get insurance/contract looked over and treat the extra money saved as savings in case they come after you. Once the time limit has expired you can spend the cash?

[Denny]

You're going to get whacked for IR35 !

[hyperD]

It's OK Denny - you've grabbed a 10 - 20% more take-home than the umbrella monkeys!!!! Well done! Chill out and enjoy your reward!

[Denny]

Thanks for all your replies, I'm very grateful.

[hyperD]

My contract was set up and B2B and back-to-back (as confirmed with client, which I saw evidence of).

If you have a true B2B suppliers contract and purchase order setup then you are laughing wrt IR35 and regardless of what you do with the client i.e. name tags, meals, days out, porno, brothels etc whatever you heard makes no difference whatsoever...

I am also careful to behave as a B2B contractor by working out of my home office most of the time and only visiting the client site when I need to do a face to face.

This is what I'm saying - tone down the desperation to be seen as a bona fide business and act as a great consultant to be with. This is worth more than the IR getting their snout into "perceived" actual operations.

However, my name is on the office door which I am not pleased about either.

Do what I did - steal the name tag and blame the Romanian programmers.

However, I feel as I'm being dragged into the personal services arena more so now and that my client is viewing my contractual status as supplier as a smokescreen instead of a real own company.

"It's just your uncle talking" - Obi Wan.

If you are providing a service for a client direct under a contract of services specific for a project at a fixed price then it doesn't matter what the client thinks i.e. whether you are a contractor or a real company: he's just interested in you, a representative of your company, to provide a product. And he wants reassurance, not surliness.

He keeps referring to me as a member of a team (which I don't mind if we're talking deliverable outputs whereby working with others is essential to get it done, but now it seems that it extends to how I am being viewed on the programme as a whole (as if I belong to it rather than the programme being a client organisation).

Irrelevant to the IR investigation team. As a supplier of services you should be IMMERSED in the team, helping them, leading them etc

For example, today I got an invite for a meal out 'with the team' next week with my name on a general programme distribution list. I am pretty angry about this because I feel that my company should have been invited on my own e-mail addy which my client knows exists and has corresponded to on a regular basis in the past.

Irrelevant. Be thankful you get an invite. IR cannot trace this as such and certainly wouldn't declare you a "disguised" employee of the company because of this action alone.

I do most of my work on my own computer but do have a company provided laptop for 'network' purposes only (the addy was sent to this laptop address).

It is extremely rare that you can plug any old laptop into the Corporate Network due to some security issues. Using your own equipment is a great pointer to non-IR35. What I used to do with an old (OK, leading edge) media company was to say that due to the nature of the project, I had to use specialised client equipment to connect to the broadcasting network and specialist equipment (which was true. Kind of.).

How do I handle this? I feel annoyed that I am being treated and considered as an intrinsic member of a team when I have behaved and made clear all along that I am a separate supplier company. I don't even eat in the staff restaurant and come and go as I please like any other external supplier. However, even this is difficult to differentiate as many of the personal service contractors and staff can 'work from home' too (I use the term 'working out of my home office and set my network profile up as a separate business). Clearly, they are not taking my business status seriously enough, if they are doing this, despite all the evidence that I am behaving as a supplier not a team member.

I believe they don't even realise let alone comprehend how IR35 affects contractors. To be honest, if your contract states B2B (and for your sanity get it checked by Accountax, SJD and any of the other guys that specialise in IR35) everything else is pretty moot. Don't make a scene, don't alienate yourself. Be thankful that your contract is as B2B as you could ever make it. It's just the fear of the IR35 spectre that has caused you and every other contractor to undergo this ridiculous uncertainty.

Am I making a fuss over nothing or do I have to be cautious. The programme manager also sends out a holiday fill in sheet each week which so far I have avoided filling in. However, I am on that list too.

Do I ask to be removed from all irrelevant non-deliverable distribution lists that have nothing to do with my work schedule outputs or do I stay quiet and put up with it?

Serious answers only please. I would really appreciate some good, relevant replies from those who work (contract terms and behaviours) as own business contractors genuinely viewed as outside of IR35 who work for large clients on extended contracts.

To be honest, overall, I think you are too paranoid about this.

Firstly, IR35 investigations are rare. If they do occur, get professional help before you even reply to the IR. It will save you money in the long term and the pros will do their work without you putting your foot in. Never, ever reply direct to the IR on a PAYE audit - GET PROFESSIONAL HELP!

If your contract has been written as B2B as you've stated, then all the other "soft" IR35 pointers that so many ambitious temps/non-IR35 "percieved" contractors whinge about are irrelevant - the HMC&R are not going to declare you IR35 because you went to a team party and they put your name on a door.

If you genuinely have MOO, control, substitution etc written in to your contract (and pay a few quid to get it checked out accordingly - if OK then you may consider not getting IR35 insurance unless you believe there is some uncertainty if the IR realising this - and PAYE audits can be expensive so for peace of mind check out the PCG) then you have nothing to worry about.

Back to what I was saying - the ideal thing is to register yourself as a preferred supplier of services with the multi-nationals and have a genuine B2B Purchase Order & contract (normally fixed price) for a specific piece of work.

And avoid HR at all costs. The problem is, and always is, you want to be seen as a true business provider. So when someone asks you an appropriate question of "what happens if you get run over by a bus?" you can immediately say you have other resources (sub-contract, which is what I do genuinely) to carry on the work, other partners (wife, shareholder) - and everything is escrow for the client (unless you're going for the licence)!


Oh, and meant to add: at this leading edge media company I worked at once as a contractor, I went in a year later as fixed price for a job (about to go llive now). The client suggested I took my laptop in and sat and a spare desk. I told him I would be doing all the development offsite at my own premises to save him the assets. It took him a while to make the paradigm shift from me being a contractor to genuine business. I, like yourself, went in for meetings and yet they still invited me out for meals, trips to the canteen (uuurgh) and other client perks (that I should really declare but I'm not!.

Bottom line - irrelevant - but I fitted in without trying to make a bit of a stand off with everyone - that may or may not have understood this deeply infuriating legal position that one has been conditioned to try and act out.

[Pondlife]

Everyone must have been "not worth listening to at some point" until they made enough of these types of posts. BTW what is the trigger number of posts to move on from NWLT? Edit: Yes! I'm Not..Not worth listening to anymore.

I guess that means 30

Congrats. Most get banned at 24

[Diestl]

Everyone must have been "not worth listening to at some point" until they made enough of these types of posts. BTW what is the trigger number of posts to move on from NWLT? Edit: Yes! I'm Not..Not worth listening to anymore.

[Pondlife]

You're going to get whacked for IR35 !

Care to eplain in more detail?

[Andyw]

You're going to get whacked for IR35 !

[DimPrawn]

Denny get some IR35 insurance (from the likes of PCG) so that even if you are challenged (and lets face it, the IR, driven by the New Lie, want to put IT contractors out of business, so the chances are everyone will be challenged), you have a good tax and legal team behind you.

Careful not to let the spectre of IR35 drive you mad. Very few cases that have been backed by the PCG insurance have been lost (something like 3000 won, 3 lost) so chill.

[XLMonkey]

I'm more interested in averting any possibility of an IR investigation with the end client and being caught up in a personal service -v- B2B perception problem.

I am paid a daily professional fee and had Schedule of Works drawn up, no MOO and full rights of substitution. I don't even have client control in the contract. Nevertheless, the IR still see 'actions on site' as being more important than the contract terms themselves. My client has never tried to impose any rules on me about working hours, time allowed at home or anything else that suggest personal service. It's just the 'member of a team' part I am uncomfortable about.

To be honest, what you've written above is (almost certainly) sufficient to demonstrate that you are operating in business on your own account, and hence outside the scope of IR35.

This issue is a common one, though. The nature of contracting/consulting work is that you need to be part of the client's team in order to be as effective as possible. I don't see participation in those sorts of team building events to be in any way an indicator of quasi-employee status, or of a lack of respect for your status as a supplier. I've worked for long periods with big consultancy firms, and they do this sort of thing all the time without any suggestion that it means that their consultants are actually the client's employees.

I would advise you not to worry about this, but instead to ensure that you have a robust paper trail demonstrating your status as a business. In my case, this translates to basic professional stuff like:
- bi-weekly progress reports against my terms of reference
- deliverables acceptance sheets, signed off by the client, about every 2 months
- once a quarter, asking the client to fill out a customer satisfaction form for the services that have been provided.

With a papertrail like that, it is entirely irrelevant which distribution lists etc you are on. You can just package up all the audit trail (with client signatures) and send it off to HMRC -- they will get the message.

[Lockhouse]

I've had 5 contracts investigated and IMHO you are way outside. You have a genuine ROS, no D&C and the minimum of MOO. You are at your own office using your own kit most of the time. The IR might ruffle your client's feathers out of spite (and probably would), but there's no way they'd get you. If you can get the client to sign a COA letter, then all the better but I wouldn't sweat it.

Andrew

[Cowboy Bob]

I'm more interested in averting any possibility of an IR investigation with the end client and being caught up in a personal service -v- B2B perception problem.

As I understand it, the investigations are random anyway, meaning that however you run your business you have a chance of being investigated. This can't be avoided.

What you need to worry about is the potential conclusion of the investigation, which from what you're saying, doesn't seem like a problem. Say you've got a building site with 10 builders all working and sub-contracting to a larger company. Do they work as a team, or do they all work independently? Do they use the cement mixer that the larger company provides, or do they all bring their own?

Being an independent contractor and also being part of a team and/or using client supplied resources are not mutually exclusive and don't really have any bearing on IR35 status.

[Denny]

I also work for a large blue-chip. Our "team" is made up of a mix of permies, outsourced Indians on-site, outsourced Indians who fly over here for a week or two then fly back home and continue working from there, B2B contractors, agency-provided contractors, and a couple of consultants (IBM, Accenture, that sort of thing).

Everybody is treated the same - team mail lists, access to restaurant/gym, "compulsory" yee-ha-aren't-we-doing-well meetings, leaving drinks, etc etc.

I wouldn't sweat it. As MF says, you might end up alienating yourself and find the contract not being renewed as you're "not a team player".

Thanks but that puts you squarely in the IR35 inclusion camp, as far as I can see. I am not planning on a strategy based on 'getting away with it' but one of genuine B2B arrangements. Another contractor I work with also works like you and if the IR was a bluebottle on the wall they would conclude very quickly that he was inside not outside of IR35. He uses the staff facilities, using the company phones all the time, uses the company laptop and is only ever off site when he on business abroad. That to me does not consistute a proper B2B arrangment.