Reply to: IR35 Status Determination Statement

[thesquaremile]

its complex. These are pillars and each has a kind of weighting which will affect the outcome. Even then HMRC will still want to argue it. That's why IR35 had been such a mess for the last 20 years cummulating in where we are now.

The CEST tool doesn't even address these three properly either.

Nothing is black and white in IR35.

That said that's going into the nuances of IR35. I believe the bit in bold at the close of Dave Bs post answer your question does it not?

It does, but as you say, nothing is black and white. Thanks for your response!

[BR14]

No I am afraid not. These are pillars and each has a weighting which will affect the outcome. Even then HMRC will still want to argue it. That's why IR35 had been such a mess for the last 20 years cummulating in where we are now.

The CEST tool doesn't even address these three properly either.

Nothing is black and white in IR35.

ah, so it's InfraRed35??

[northernladuk]

Apologies for a really daft question - but can I just confirm that for in order to be caught by IR35 - all the 3 'employment contract' factors must apply? Is it an all-or-nothing condition?

Thanks!

its complex. These are pillars and each has a kind of weighting which will affect the outcome. Even then HMRC will still want to argue it. That's why IR35 had been such a mess for the last 20 years cummulating in where we are now.

The CEST tool doesn't even address these three properly either.

Nothing is black and white in IR35.

That said that's going into the nuances of IR35. I believe the bit in bold at the close of Dave Bs post answer your question does it not?

[thesquaremile]

Status determination

IR35 status is determined by testing contracts and working arrangements against a hypothetical contract of employment. This contract is based on employment law and relies on 3 key factors.
• Supervision, Direction or Control,
• Mutuality of Obligation
• Right of Substitution.

These factors are all recognized in law as being essential to a contract of employment and have been tested repeatedly in the courts. While other circumstances may be considered (See Other Factors below) for a contract of employment to exist all three must be in effect

Apologies for a really daft question - but can I just confirm that for in order to be caught by IR35 - all the 3 'employment contract' factors must apply? Is it an all-or-nothing condition?

Thanks!

[Wobblyheed]

Consultants will use <CLIENT> supplied equipment where appropriate, but will otherwise provide their own as required. This includes but is not limited to computer equipment, office equipment, mobile devices such as phones and tablets, stationary and transport.

Sorry but it's a bugbear of mine...

[eek]

I see SDC as an HMRC-inspired interpretation of control. It has a long history, but appears prominently in the agency legislation. I don't recognise SDC as something from case law, rather "control". I also recognise the how element of control as being paramount.

I disagree about MoO. What happens after the work has been concluded is very important.

There are some very good pointers in this short (albeit quite old) article:

IR35:Substitution, control and mutuality of obligation

But what happens after is actually incredibly nuanced (I can't remember the exact case law but I know it's no longer as simple as nothing available, no obligation). It's why Christmas is so much easier to explain

[jamesbrown]

Will correct the typo

Not sure I follow what you are saying on the SDC part. Can you clarify / elaborate?

For subsitution, I explained this to the client in the previous doc. this isn't intended to explain IR35 in detail, but to set out the justification for an outside status. It already has a lot more exposition in in that some of the templates out there such as the QDOS version.
https://www.qdoscontractor.com/docs/...e.pdf?sfvrsn=2

Not sure it needs that level of detail re. MoO. If a contract ends, whether it is one of employment or not then any mutual obligation ends as well.

I see SDC as an HMRC-inspired interpretation of control. It has a long history, but appears prominently in the agency legislation. I don't recognise SDC as something from case law, rather "control". I also recognise the how element of control as being paramount.

I disagree about MoO. What happens after the work has been concluded is very important.

There are some very good pointers in this short (albeit quite old) article:

IR35:Substitution, control and mutuality of obligation

[eek]

Fair enough, I did say this was specific to my current engagement with the client. Travel isn't part of the deal and I treat any request case by case and either pay it myself for a short hop to another site or refuse for anything substantial.

Sadly, as this is being pinned up and will be used by others it needs to be more than just what your client needs. The things I'm adding are designed to make this more generic for use everywhere.

[eek]

Will correct the typo

Not sure I follow what you are saying on the SDC part. Can you clarify / elaborate?

For subsitution, I explained this to the client in the previous doc. this isn't intended to explain IR35 in detail, but to set out the justification for an outside status. It already has a lot more exposition in in that some of the templates out there such as the QDOS version.
https://www.qdoscontractor.com/docs/...e.pdf?sfvrsn=2

Not sure it needs that level of detail re. MoO. If a contract ends, whether it is one of employment or not then any mutual obligation ends as well.

MoO is really simple.

As an employer I have to pay an employee even if I don't have anything for them to do and send them home.
As a client I can tell the contractor there is nothing to do this week so you don't need to come in.

There is case law that make contract ends and subsequent work far more complex than the simple example of Christmas closure, staff are paid, contractors aren't.

[DaveB]

Ignore last point as there is also this bit:



Sorry but if a business expects me to travel on behalf of their business I would be expecting them to pay for my travel costs (and not arguing over them).

Again I can see where you are coming from but that's something I don't want to give them.

Fair enough, I did say this was specific to my current engagement with the client. Travel isn't part of the deal and I treat any request case by case and either pay it myself for a short hop to another site or refuse for anything substantial.

[eek]

Also

They are not restricted in the number of day’s holiday they may take or required to give notice or obtain permission for holiday time beyond notifying the client that they will not be available as a matter of professional courtesy.

Can be made simpler.

They do not need to ask or obtain permission to take holiday nor are the number of day's taken restricted

[DaveB]

Couple of thoughts. First, “discreet” typo.

On SDC, this isn’t really the test that I’m aware of w/r to IR35 case law, rather “control” and, in particular, the “how” element of control. I think the what/when/where/how distinction is more useful than the SDC distinction in terms of a typology of control and I think the how matters more than others, unless it’s a specialist role and the client has no permie specialists that can dictate the how.

On substitution, the test is that the right must not be unreasonably fettered. This can be confusing. Perhaps you can add some examples about fettering and what is reasonable/unreasonable. You do this to some degree, but examples might help.

On MoO, it may be worth distinguishing between MoO during a contract and what happens when it ends.

Will correct the typo

Not sure I follow what you are saying on the SDC part. Can you clarify / elaborate?

For subsitution, I explained this to the client in the previous doc. this isn't intended to explain IR35 in detail, but to set out the justification for an outside status. It already has a lot more exposition in in that some of the templates out there such as the QDOS version.
https://www.qdoscontractor.com/docs/...e.pdf?sfvrsn=2

Not sure it needs that level of detail re. MoO. If a contract ends, whether it is one of employment or not then any mutual obligation ends as well.

[eek]

Think \I have that covered in the last section on Client Integration :

I've done required course that are not regulatory just required (whistleblowing, corporate security, timesheet entry)... Heck health and safety usually goes well beyond what's legally required.

There is likely to be other training required which is project based - I've been subjected to 2 days of internal enterprise architecture in the past as it the course was on and it was easier for me to sit there than find everyone and ask the questions.

[jamesbrown]

Couple of thoughts. First, “discreet” typo.

On SDC, this isn’t really the test that I’m aware of w/r to IR35 case law, rather “control” and, in particular, the “how” element of control. I think the what/when/where/how distinction is more useful than the SDC distinction in terms of a typology of control and I think the how matters more than others, unless it’s a specialist role and the client has no permie specialists that can dictate the how.

On substitution, the test is that the right must not be unreasonably fettered. This can be confusing. Perhaps you can add some examples about fettering and what is reasonable/unreasonable. You do this to some degree, but examples might help.

On MoO, it may be worth distinguishing between MoO during a contract and what happens when it ends.

[eek]

Ignore last point as there is also this bit:

• Business travel is carried out at the consultants own expense.

Sorry but if a business expects me to travel on behalf of their business I would be expecting them to pay for my travel costs (and not arguing over them).

Again I can see where you are coming from but that's something I don't want to give them.