Dealing with a company that bases IR35 decision on the CEST tool.

[FIERCE TANK BATTLE]

Thanks for replies.

I agree I am clearly outside, but this is more about the CEST tool, cos it's filled in by someone with no real understanding of IR35 other than what they googled.

Thanks for the CEST answers. It looks like it made a decision based on the 2nd criteria. Hopefully I can persuade them to answer in the same way, but it depends if I can influence the person filling it in - most bods will answer the wrong thing because they won't fully understand what it's asking. E.g. can I choose when and where I work - they'll be thinking no, we need him in the office at least *some* of the time because what would happen if we needed to talk to him? But the reality is yes I'll choose how I work and I'll do so in a way that's conducive to the business. Sometimes I work remotely. I usually come in super early to avoid traffic etc.

I reckon I'll try to get there first by sending them an e-mail detailing the CEST answers above. If this works I owe you a pint =)

[dsc]

That's how I always understood SDC, it's the client telling you how to code, design etc. Them telling you what needs doing, what priorities are for this week and what the final result should be isn't ihmo control but I'm sure HMRC would disagree with every possible reasonable definition you chuck at them. Then again, how would they know anyway in case of an investigation? It's your word vs your client right and how each side sees things. It's like that example with Sky when they suddenly came out and said they would reject subs, there is moo and they control everything even though it might not be how things are in reality.

Also, as it's been mentioned before many times, being able to work from wherever often doesn't carry much weight, permies can often do full weeks from home and in some industries you simply can't take any work home (defence for example).

I'd focus on lack of MOO and substitute clauses with a detailed explanation that they can't reject a suitable, qualified sub.

[Peoplesoft bloke]

I disagree with your interpretation.

Firstly, the fact that they can unilaterally impose effectively a furlough mid-contract implies a distinct lack of mutuality of obligation, one of the three key foundations of employment (you would have been quite happy to do your 3 days, she said you can't work that week).

Secondly, that kind of control isn't the kind which is considered when deciding employment status. The direction and control aspect isn't really so much to do with telling you what they want you to do (although HMRC would have you believe otherwise), it's all down to whether they can tell you how to do it. For example, if you get a tiler in and say which bathroom walls you want tiled and which tiles and grout to use, and you both agree on the days which would suit you for him to come and do it, that's not D&C. If you're standing there telling him how much adhesive to use and you make him come and check with you about whether the spacers are in the right place and how he's cutting the tiles to get the corner match done properly, that's D&C.

I agree about D&C - in my niche The customers have decided to buy new fangled cloud based tiles and are relying on my knowledge of cloud based grout etc not that HMRC can see any of this


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[Snooky]

Likewise with control, we have a project manager, so they set progress meetings for the team periodically where people report progress/issues and she feeds it back to the end client to keep them up to date. If there's a problem with the project, e.g. at Christmas the supplier was on holiday, she said don't work that week (my contract is for 3 days a week since that's what the budget is).

Since they 'controlled' me for that technically you have to answer the question of if I choose my own working times as false, even though it's true.

I disagree with your interpretation.

Firstly, the fact that they can unilaterally impose effectively a furlough mid-contract implies a distinct lack of mutuality of obligation, one of the three key foundations of employment (you would have been quite happy to do your 3 days, she said you can't work that week).

Secondly, that kind of control isn't the kind which is considered when deciding employment status. The direction and control aspect isn't really so much to do with telling you what they want you to do (although HMRC would have you believe otherwise), it's all down to whether they can tell you how to do it. For example, if you get a tiler in and say which bathroom walls you want tiled and which tiles and grout to use, and you both agree on the days which would suit you for him to come and do it, that's not D&C. If you're standing there telling him how much adhesive to use and you make him come and check with you about whether the spacers are in the right place and how he's cutting the tiles to get the corner match done properly, that's D&C.

[simes]

What you told us

1. About you and the work
Who are you?
Worker

What do you want to do?
Make a new determination

Are you trading through a limited company, partnership or unincorporated body?
Yes

Have you already started working for this client?
Yes

2. Worker’s duties
Will you be an ‘Office Holder’?
No

3. Substitutes and helpers
Have you ever sent a substitute to do this work?
No, it has not happened

Does your client have the right to reject a substitute?
Yes

Have you paid another person to do a significant amount of this work?
No

4. Working arrangements
Does your client have the right to move you from the task you originally agreed to do?
No, that would require a new contract or formal working arrangement

Does your client have the right to decide how the work is done?
No, you solely decide

Does your client have the right to decide your working hours?
No, you solely decide

Does your client have the right to decide where you do the work?
No, you solely decide

5. Worker’s financial risk
Will you have to buy equipment before your client pays you?
No

Will you have to fund any vehicle costs before your client pays you?
No

Will you have to buy materials before your client pays you?
No

Will you have to fund any other costs before your client pays you?
Yes

How will you be paid for this work?
An hourly, daily or weekly rate

If the client was not happy with your work, would you have to put it right?
Yes, unpaid but your only cost would be losing the opportunity to do other work

6. Worker’s involvement
Will your client provide you with paid-for corporate benefits?
No

Will you have any management responsibilities for your client?
No

How would you introduce yourself to your client’s consumers or suppliers?
You are an independent worker acting on your client’s behalf

7. Worker’s contracts
Does this contract stop you from doing similar work for other clients?
No

Are you required to ask permission to work for other clients?
No

Are there any ownership rights relating to this contract?
No

Have you had a previous contract with this client?
No

Is the current contract the first in a series of contracts agreed with this client?
No

Does the current contract allow for it to be extended?
Yes

Will this work take up the majority of your available working time?
Yes

Have you done any self-employed work of a similar nature for other clients in the last 12 months?
Yes

...All of which resulted in an Outside determination.

[FIERCE TANK BATTLE]

Fair play.

To change the wording slightly to the OP in respect of Substitution;

1. Engage the CEST tool
2. Answer all questions accurately according to contract and working practice
3. For the Substitution question, answer that you Can forward a Sub, and that the Client can Reject.

And let us know if you have the same Outside result as that which I had.

I did that originally, and got 'inside' because of the substitution. Did it again with client can't reject and got outside. :-|

[WordIsBond]

From CEST:

Does your client have the right to reject a substitute?

A substitute is someone you send in your place to do your role.

This can include rejecting a substitute even if they are equally qualified, and meet your client’s interviewing, vetting and security clearance procedures.

If the client really is willing to be flexible, you want the following or comparable wording in your contract:

ContractorLTD can send any individual to do the work that is fully qualified and meets ClientCo's interviewing, vetting and security clearance procedures. ContractorLTD is responsible for the payment of any individual that does the work.

Then, you tell whoever is doing CEST that they answer NO, they don't have the right to reject a substitute, because they don't have the right to reject someone who is equally qualified and meets their interviewing, vetting and security clearance procedures.

Go through CEST question by question, figure out which answers are best for IR35, as much as possible get the client to agree to the working practices described, as much as possible get the client to agree to wording in the contract that reflects that, and put together a guide to whoever is doing CEST -- "this question is addressed in the contract with this wording, the proper answer here is X".

Obviously, you need to be accurate. You can't put language in the contract for CEST that isn't reality. No shams here. But if the client is willing to work with you to the extent that a substitute is acceptable to them, you should easily be able to construct an outside-IR35 working relationship and have the contract and CEST determination that matches.

[simes]

Not really; while I understand your sentiment, this seems a genuine question with an action to follow - following a course of action based on advice (rather than experience or actual knowledge) seems crazy. A lot of the time, people are hoping someone else has encountered these things before, e.g. notice period questions, bleeding radiators, etc.

Fair play.

To change the wording slightly to the OP in respect of Substitution;

1. Engage the CEST tool
2. Answer all questions accurately according to contract and working practice
3. For the Substitution question, answer that you Can forward a Sub, and that the Client can Reject.

And let us know if you have the same Outside result as that which I had.

[LondonManc]

All comes down to reality though, someone somewhere will have to put their neck on the line and say that they'll accept any substitution. And whatever manager it is 5 levels up the hierarchy in another country at the head office so far removed it's ridiculous will be like 'well we would want to check they're suitable right?'.

Likewise with control, we have a project manager, so they set progress meetings for the team periodically where people report progress/issues and she feeds it back to the end client to keep them up to date. If there's a problem with the project, e.g. at Christmas the supplier was on holiday, she said don't work that week (my contract is for 3 days a week since that's what the budget is).

Since they 'controlled' me for that technically you have to answer the question of if I choose my own working times as false, even though it's true.

It's worded like that on purpose I'm sure to catch you inside. It's not me doing the tool but the person in charge of me who has no idea about IR35 and just answers the CEST tool. "We want him to come in so he can work alongside other people" is probably what they'd say.

Argh. It's like if you could explain/clarify your answers it'd be fine.

Thought for the day: If I were still a contractor, I'd happily pay some else 3 days of rate to come in and get up to speed and then an extra day to do the work on Friday while I'm off playing golf. 4 days of substitution cash (c£2k) is worthwhile spend for a cast iron outside IR35 determination.

[FIERCE TANK BATTLE]

All comes down to reality though, someone somewhere will have to put their neck on the line and say that they'll accept any substitution. And whatever manager it is 5 levels up the hierarchy in another country at the head office so far removed it's ridiculous will be like 'well we would want to check they're suitable right?'.

Likewise with control, we have a project manager, so they set progress meetings for the team periodically where people report progress/issues and she feeds it back to the end client to keep them up to date. If there's a problem with the project, e.g. at Christmas the supplier was on holiday, she said don't work that week (my contract is for 3 days a week since that's what the budget is).

Since they 'controlled' me for that technically you have to answer the question of if I choose my own working times as false, even though it's true.

It's worded like that on purpose I'm sure to catch you inside. It's not me doing the tool but the person in charge of me who has no idea about IR35 and just answers the CEST tool. "We want him to come in so he can work alongside other people" is probably what they'd say.

Argh. It's like if you could explain/clarify your answers it'd be fine.

[LondonManc]

Indeed, but then wouldn't that answer apply to much of what is discussed on this forum?

...Which would render the forum redundant and not offer the much needed platform for people to look down on others from their lofty perch with their superior knowledge.

Not really; while I understand your sentiment, this seems a genuine question with an action to follow - following a course of action based on advice (rather than experience or actual knowledge) seems crazy. A lot of the time, people are hoping someone else has encountered these things before, e.g. notice period questions, bleeding radiators, etc.

[simes]

IANAL but I'd be asking a professional body like QDOS rather than a bunch of charlatans off the internet.

Indeed, but then wouldn't that answer apply to much of what is discussed on this forum?

...Which would render the forum redundant and not offer the much needed platform for people to look down on others from their lofty perch with their superior knowledge.

[LondonManc]

IANAL but I'd be asking a professional body like QDOS rather than a bunch of charlatans off the internet.

[simes]

Concentrate on the three pillars of IR35. Both from a 'contract inclusion' and 'working methods' point of view.

Substitution - The CEST tool only now seems to want to know that you have a right to Offer a Substitute, but that the client can turn them down if necessary. Having personally answered the CEST tool question in exactly this way, (and with due deference to the other questions) I have been found Outside.

MoO - Ensure that everyone understands that there is no MoO. If the work dries up, you can be let go. If you've done the work that you're interested in, then you don't have to accept incoming work. Include a contractual zero days' notice and a furlough if necessary.

Control - Ensure that everyone knows you work from home / Spain, the moon, and no one will be upset. And then put that into practice and document.

Practically speaking, this should cover your immediate concerns, and those of the client.

[FIERCE TANK BATTLE]

Just been hit by the IR35 question from high up in the company, they send a ton of powerpoints to the supervisor and said run the CEST tool and feed back immediately.

My contract ends before march, and I'll be going direct, thus getting a new contract that I will have complete control over (rather than via an agency). I'm wondering if there's any way to word it so I can actually pass the CEST tool.

I mean at the moment I work when, where and how I want, I frequently work less days when the client doesn't need me (usually 3-5 days a week) and sometimes reject if a client wants me to work some extra days. I have a statement of work and a fixed project.

TBH I don't really know what to do to pass it, short of literally getting a substitute in, which would be a pain since there's a basic background check required.

Any suggestions? The client is super keen to keep me on so they'll be as flexible as I like. I just think their superiors in some central office miles away want concrete proof of working outside and have basically said CEST or bust.

I'm considering literally getting someone in on my behalf for a couple of days though if that's the only way to pass it. They'd be fine with that.

Any suggestions?

Perhaps I can get them to agree not to vet a substitute but seems crazy, because they spoke to *me* before I started the job, so how is that any different from speaking to a substitute to check them out? Likewise if I offer a substitute and they accept, then it's as good as a pass, yet I can offer a substitute, and they can still vet him and approve.

Baffling.