Reply to: A suggestion - for free - for critique

[chubacabra]

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it"

Ronald Reagan

Except for multinationals like Facebook et al.

[LisaContractorUmbrella]

I really hope this turns out well... I feel like I'm being mugged multiple times by the government at the moment!

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it"

Ronald Reagan

[chubacabra]

This is an argument that we've had with HMRC but they will provide their own interpretation once they publish new legislation with the corresponding examples to illustrate. As JamesBrown says HMRC's interpretation will eventually be judged in Court and it may be that their interpretation is not that of the Judge who's looking at the case. The real point at issue is that determination for status will lie with the end client - a risk averse company could decide that it's not worth risking debt transfer and they will deem that all contractors are under SDC, a similarly risk averse company could decide that with SDC lies the risk of employer liabilities so they will decide all contractors are not under SDC. Until 25th November we won't know what's going to happen.

I really hope this turns out well... I feel like I'm being mugged multiple times by the government at the moment!

[LisaContractorUmbrella]

Exactly! So they've made it so it's impossible for anyone to fall outside of this

But in that respect Supervision, Direction or Control would apply to any company/person working on a project in any industry. My example about a builder can be applied absolutely anywhere!

This is an argument that we've had with HMRC but they will provide their own interpretation once they publish new legislation with the corresponding examples to illustrate. As JamesBrown says HMRC's interpretation will eventually be judged in Court and it may be that their interpretation is not that of the Judge who's looking at the case. The real point at issue is that determination for status will lie with the end client - a risk averse company could decide that it's not worth risking debt transfer and they will deem that all contractors are under SDC, a similarly risk averse company could decide that with SDC lies the risk of employer liabilities so they will decide all contractors are not under SDC. Until 25th November we won't know what's going to happen.

[jamesbrown]

Apart from applying logic to HMRC, that's a fair summary. However, Direction is the killer; you aren't there to make up work to be done, at some point someone at the client has to let you know what they want doing - even if it's only to say do your thing to this new programme if you would like to please - and that constitutes Direction. since the test is going to be Supervision, Control or Direction, you've already lost.

And you can make the same case for Supervision - someone has to authorise your timesheet - and Control - someone has know you were there and did something - so you're stuffed anyway.

As with the current IR35, there'll be an enormous gulf between what HMRC implies through their examples and the reality of the situation for anyone that is willing to pursue a case through the courts. They (HMG) basically have two options. One is to introduce a clear statutory test, in which case the test is clear. The other is to retain vague notions, such as SDC, in which case there is a presumed deterrent effect, broad in scope. If they go with the latter, a majority of contractors are going to pass the test, providing the courts are able to decide. There is literally zero possibility that a court would interpret direction as specification (what) alone and, in any case, a degree of specification is central to being able to complete a job, so it is indiscriminate. There is no precedent for such an interpretation and judges do not operate in a vacuum (on the contrary). Also, I don't believe this is really their (HMG's) intention, because SDC wouldn't be necessary if the aim were to catch everyone. The real issue here is with engagers making a decision about SDC.

[chubacabra]

Apart from applying logic to HMRC, that's a fair summary. However, Direction is the killer; you aren't there to make up work to be done, at some point someone at the client has to let you know what they want doing - even if it's only to say do your thing to this new programme if you would like to please - and that constitutes Direction. since the test is going to be Supervision, Control or Direction, you've already lost.

And you can make the same case for Supervision - someone has to authorise your timesheet - and Control - someone has know you were there and did something - so you're stuffed anyway.

Exactly! So they've made it so it's impossible for anyone to fall outside of this

But in that respect Supervision, Direction or Control would apply to any company/person working on a project in any industry. My example about a builder can be applied absolutely anywhere!

[MPwannadecentincome]

Apart from applying logic to HMRC, that's a fair summary. However, Direction is the killer; you aren't there to make up work to be done, at some point someone at the client has to let you know what they want doing - even if it's only to say do your thing to this new programme if you would like to please - and that constitutes Direction. since the test is going to be Supervision, Control or Direction, you've already lost.

And you can make the same case for Supervision - someone has to authorise your timesheet - and Control - someone has know you were there and did something - so you're stuffed anyway.

I can't see any role where "someone at the client has to let you know what they want doing" - why is that considered "Direction"?

[malvolio]

Apart from applying logic to HMRC, that's a fair summary. However, Direction is the killer; you aren't there to make up work to be done, at some point someone at the client has to let you know what they want doing - even if it's only to say do your thing to this new programme if you would like to please - and that constitutes Direction. since the test is going to be Supervision, Control or Direction, you've already lost.

And you can make the same case for Supervision - someone has to authorise your timesheet - and Control - someone has know you were there and did something - so you're stuffed anyway.

[LisaContractorUmbrella]

HMRC have admitted that they will need to publish far, far more guidance if this all goes ahead but, historically, the examples they use are very rarely reflective of real world situations

[chubacabra]

At the risk of getting shot down in flames, I've tried to detail on a high level my job and typical setup on client site to prompt some further discussion:

I am a Software Developer in Test. I specialize in creating bespoke test automation frameworks to automate testing of software being created by other software developers on a project. Sometimes a framework will already have been started, and I will develop and enhance the existing framework.

We all work in a typical agile project team, typically there is a scrum master that facilitates the day to day running of the team - removing any blockers for the team as they arise. The rest of the team is made up of a variety of software developers, testers, database analysts and business analysts. The idea of an Agile Scrum team is that they are self organising and do not have a project manager, hence the scrum master is a facilitator.

We are provided an overall project backlog to work from, and we will have estimating meetings to define how big an individual piece of work is. Once the work items are prioritised by the business we will then take them into the work stream and work on them.

I fully decide how I go about writing software to automate a particular test or set of tests. The code will be peer reviewed by other developers on team and then added to the project codebase. Once I have finished working on the item it will be marked as done and I will move onto the next prioritised item.

From my perspective:

Supervision

No one really oversees my work. Could peer reviewing of code be considered supervision? Peer reviewing is always going to be involved in a project involving more than one person. It is not something that is limited to a client > employee relationship, more a collaborative piece of work.

Direction

No one makes me do my work in a partciular way. I am free to carry out the work as I see fit. This is the whole reason I am employed - for my expertese in this field.

Control

Does somebody dictate what work I undertake? We have a project backlog that is naturally organised by the business in priority of the business benefit that they will gain. Is this subject to change? Yes, but does that constitute control? Essentially I take the next work item that is made available out of a project as a whole.
I generally would not be moved from one project to another, unless I renew my contract with the client thus moving onto a new project

According to HMRCs view of the world (Example 1 of the SDC doc link above) I would be considered an employee.

So does that make a builder doing a piece of work for me an employee if I decide to change the scope, priority or requirement of the building project he is undertaking for me?

It just seems that the examples that HMRC use are deliberately unworkable to acheive the outcome they desire!

Any discussion welcome!

[DonkeyRhubarb]

This may, or may not, get around IR35.

But I would be more concerned about the Agency Legislation.

https://www.gov.uk/government/upload...g_examples.pdf

[malvolio]

So stop trying to advertise that organisation on the thread please. All you achieve is a derail. It doesn't enhance their reputation one bit, quite the opposite.

You're the one making a fuss over nothing and taking this thread off track. All I suggested was that there is potentially fruitful common ground

[TykeMerc]

The structure of cash flow would be the issue.

How do you divide it up? If Contractor A generates £120k of income, as does Contractor B, whereas Contractor C generates £100k and Contractor D £70k because he's been on the bench for 5 months, what happens?

Absolutely, but to get that far first you need people to overcome the concept of working together or under a joint structure.

The financial structure is not only difficult to frame it's impossible to sell.

[LondonManc]

In response to the original suggestion, the major issues are trust, self interest and independence, none of which sit well in your scenario, but they're of great interest to most contractors.

I suspect you were expecting a strongly negative reaction, it is an interesting concept, what amounts to being a contractors cooperative, but the structure would need a lot more thought before it's appealing to many of us.

The structure of cash flow would be the issue.

How do you divide it up? If Contractor A generates £120k of income, as does Contractor B, whereas Contractor C generates £100k and Contractor D £70k because he's been on the bench for 5 months, what happens?

[TykeMerc]

In response to the original suggestion, the major issues are trust, self interest and independence, none of which sit well in your scenario, but they're of great interest to most contractors.

I suspect you were expecting a strongly negative reaction, it is an interesting concept, what amounts to being a contractors cooperative, but the structure would need a lot more thought before it's appealing to many of us.