Reply to: Dividends

[MyUserName]

Remind me again of all those IR35 cases that HMRC are winning on a regular basis?

Irrelevant - you said that it is easy for contractors to how that they are outside ir35, I am trying to show that it is not necessarily easy.

Do you have any reply to the points I raised or do you concede that it is not necessarily easy to prove one is outside ir35?

[TheCyclingProgrammer]

Remind me again of all those IR35 cases that HMRC are winning on a regular basis?

[MyUserName]

D&C extends to more than just being left to your own devices. As an expert consultant, I have influence over the technical direction of a project. Expert decisions are left to me to make.

*shrug* any senior perm staff would have the ability to make expert decisions in their field.

I'm not obliged to do whatever my clients tell me to. They can ask me to attend the office for some reason; they can't tell me to.

Has this ever materially affected day to day work? Have you ever refused against clien'ts wishes in a way that a perm staff member might not? If not then this is just words on paper which HMRC will ignore.

I don't ask for time off; I tell them when I will be available. That last point alone is a fairly big pointer to there not being an employer/employee relationship (unless you think most premies can just take time off whenever they like?).

Where have HMRC declared that that is a big pointer to not being under IR35?

You have to be pragmatic. It's fine to have a reasonable expectation that a certain project might last for a certain amount of time, especially if you're working on a fixed scope/cost project. But projects can get canned, budgets can run out and on any given day my services might not be required - in this case, I have no work and I don't get paid. Again, nothing like an employer/employee relationship.

If not getting paid for not working was a defining point then pretty much every contractor would easily be able to show that they are outside IR35 so it is probably not considered to be that significant. The lack of MOO is a good indicator, can you show how it has materially affected you in a way it would not have affected perm staff? If not then it is just words on paper which HMRC will ignore.

So presumably if said project ends or is put on hold, said permie is going to get laid off, or do you think their employer just find something else for them to do instead?

I believe they are required to find something else for them to do if possible, however unless this has materially affected you it is not really relevant.

I can't believe we're having a debate over this.

Indeed we are. You said it was easy for most contractors to show they were outside IR35, I am showing that it is not necessarily that easy.

[amcdonald]

Any relationship which starts with your submitting your personal CV is immediately off to a bad start then. We live in the real world where clients are after an individual to do some work. Whether you are running your services through a brolly or sole-trader status or a tin-pot company with delusions of grandeur is not something they give a tulip about.

They do care if you're a sole trader, they can't avoid their NI obligations then!

[TheCyclingProgrammer]

I'm very risk averse.

Whilst there is a lot a contractor or consultant can do to ensure they remain outside of IR35, there is ultimately a limit. If HMRC choose to open an enquiry, there isn't much you can do to stop them and if HMRC are going to use their stupid BETs as the basis of who to investigate, so be it. All you can do is make sure you have your house in order and good legal representation. I'm risk averse too but I try not to worry about things that are outside of my control.

[sasguru]

Do you worry about it? If so, why?

I'm very risk averse.

[TheCyclingProgrammer]

But I still don't get 20 points on the IR35 test. DO you?

Nope. Nor do I give a tulip. The test are largely bollocks. I'm satisfied enough with my IR35 status to not worry about it on a daily basis (working conditions + strong contract courtesy of PCG are enough for me) and in the unlikely event that HMRC come sniffing, the PCG lawyers can deal with it.

It sounds like you and I work in much the same way. It doesn't sound like you're inside IR35 either. Do you worry about it? If so, why?

[TheCyclingProgrammer]

If you are left to your own devices on how to do the work but so are the permies then you are under the same D&C as they are.

D&C extends to more than just being left to your own devices. As an expert consultant, I have influence over the technical direction of a project. Expert decisions are left to me to make. I'm not obliged to do whatever my clients tell me to. They can ask me to attend the office for some reason; they can't tell me to. I don't ask for time off; I tell them when I will be available. That last point alone is a fairly big pointer to there not being an employer/employee relationship (unless you think most premies can just take time off whenever they like?).

If you have always had relevant work then the lack of MOO would not be an issue and if you have never had cause to bring in a sub that can be ignored as a sham clause. What do you do to differentiate yourself?

You have to be pragmatic. It's fine to have a reasonable expectation that a certain project might last for a certain amount of time, especially if you're working on a fixed scope/cost project. But projects can get canned, budgets can run out and on any given day my services might not be required - in this case, I have no work and I don't get paid. Again, nothing like an employer/employee relationship.

But the permie sitting next to me only works on this project. The other projects require different skills which he does not have.

So presumably if said project ends or is put on hold, said permie is going to get laid off, or do you think their employer just find something else for them to do instead?

I can't believe we're having a debate over this.

[sasguru]

Well fortunately for me, I don't do projects where I'm treated as a "resource". I'm not a bum on seat contractor. I'm engaged to work on specific projects and if I need to use an external resource to assist with the project I will do so. It's in my contract and it's the contract my clients agree to.

I too work from home 80% of the time and only attend client offices as necessary. My clients have little direction or control over me. I work my own hours and take the lead on the projects I'm engaged on because I'm hired as an expert in my field.

It's so easy to keep yourself outside of IR35 these days, it just depends on how you approach your business.

I'm not a resource, bum on seat contractor either, I'm a domain expert, who defines the scope and timing of the project, and takes the lead.
I don't go to the clients at all except for initial analysis and reqs meetings.
(Some of my clients are overseas). I have had multiple clients at once.
My clients certainly don't control my hours.
I too can use an external resource.

But I still don't get 20 points on the IR35 test. DO you?

[TheCyclingProgrammer]

Any relationship which starts with your submitting your personal CV is immediately off to a bad start then. We live in the real world where clients are after an individual to do some work. Whether you are running your services through a brolly or sole-trader status or a tin-pot company with delusions of grandeur is not something they give a tulip about.

It wasn't me who brought up CVs. I can't remember the last time I sent a client my CV. They don't need to see it - they contacted me in the first place because I offer the services they require.

You're right, clients are normally after an individual and they may well have approach me as an individual but the eventual contract is between them and MyCo. As I said before, personal service is not enough to put you inside IR35, at all.

Can we remember for a moment that IR35 is all about disguised employment - i.e. the use of an intermediary where in it's absence, there would be a contract of employment between the client and the worker.

None of my contracts resemble anything like disguised employment. Hence I don't need to worry about IR35 very much (but yes, I have my PCG+ membership just in case). In fact the only time it seems to appear on my radar is discussing it on here.

[MyUserName]

It's so easy to keep yourself outside of IR35 these days, it just depends on how you approach your business.

How would you keep yourself outside IR35 in the scenario I described above?

What would happen if you had not actually used a sub and perm employees also set their own hours, worked from home 80% of the time and took the lead on their projects. Wouldn't that make it look like you were inside IR35?

[TheCyclingProgrammer]

Like someone else said, try sending someone else and see if it flies.
As it happens I work from home on fixed projects that I set the timelines for which means:
1) I could hire someone to do the work
2) If I finish a project early I can earn more money (one of the key IR35 tests)

You can bluster all you want about mindsets, but have a quick scan of the IR35 cases that have been lost (and won) to see the judges in these cases don't think like you do.

Well fortunately for me, I don't do projects where I'm treated as a "resource". I'm not a bum on seat contractor. I'm engaged to work on specific projects and if I need to use an external resource to assist with the project I will do so. It's in my contract and it's the contract my clients agree to.

I too work from home 80% of the time and only attend client offices as necessary. My clients have little direction or control over me. I work my own hours and take the lead on the projects I'm engaged on because I'm hired as an expert in my field.

It's so easy to keep yourself outside of IR35 these days, it just depends on how you approach your business.

[MyUserName]

Getting way OT now, but the IR35 link over there is your starting point. ---->.

Yep, I have browsed over them but they do not cover the points I raised. You normally only prove the lack of MOO, invoke a sub or resist D&C if the opportunity is given to you.

If you are left to your own devices on how to do the work but so are the permies then you are under the same D&C as they are. If you have always had relevant work then the lack of MOO would not be an issue and if you have never had cause to bring in a sub that can be ignored as a sham clause. What do you do to differentiate yourself?

Getting contracted to work on a specific project and never asked to work on anything else is a good thing as far as IR35 is concerned by the way. It in itself is what separates you from the permit sitting next to you, who works on whatever his employer asks him to and who gets paid regardless

But the permie sitting next to me only works on this project. The other projects require different skills which he does not have.

[d000hg]

It's up to you, the contractor, to make sure the "in practice" part aligns with the "in theory" part. Act like a business, don't let clients treat you like an employee and make it clear who's the boss.

If your clients don't like it, you need better clients.

Any relationship which starts with your submitting your personal CV is immediately off to a bad start then. We live in the real world where clients are after an individual to do some work. Whether you are running your services through a brolly or sole-trader status or a tin-pot company with delusions of grandeur is not something they give a tulip about.

[sasguru]

It's up to you, the contractor, to make sure the "in practice" part aligns with the "in theory" part. Act like a business, don't let clients treat you like an employee and make it clear who's the boss.

If your clients don't like it, you need better clients.

Like someone else said, try sending someone else and see if it flies.
As it happens I work from home on fixed projects that I set the timelines for which means:
1) I could hire someone to do the work
2) If I finish a project early I can earn more money (one of the key IR35 tests)

You can bluster all you want about mindsets, but have a quick scan of the IR35 cases that have been lost (and won) to see the judges in these cases don't think like you do.