04.07.2017

IR35 Freelancers and Contractors are Still at Risk...?

So say Computer weekly on the 1st of July 2017.

It appears that the confusion around this highly problematic area still abounds and so we took the test for a potential contract and it produces some interesting results.

The right to substitution seems to be the biggest,if you do not have that in your contract then it seems problematic.

Whether you have expenditures that are not covered by the client seems to be another, such as office, vehicle and equipment costs.

The issue of who controls what is done features highly, but as the Computer Weekly article states the above is no guarantee of clarity.

"The foundations of how to judge cases was laid down by Justice Nolan in the Hall versus Lorimer case in 1993, which stated that all factors should be taken into account and a stand-back approach used by examining the picture as a whole."
The overall picture appears to imply that the relationship for contractors/freelancers and businesses between them and the client is taken as a whole to indicate status."

We know of one case and have gleaned some information from them as to how the overall picture is ascertained.

Some small points came up that can influence how a status for a worker is assessed, if you:

  • Send a CV rather than a profile to prospective clients
  • Have a client e-mail that you use
  • Have cards with yours or your workers name on that are branded as your clients
  • State that you represent your client as if you were a workerE.g. A trainer stands up at the start and says "I am here on behalf of "Client" rather than revealing their true status
Then it is likely to be part of the whole picture that would classify you as an employee.

This is highly problematic for organisations who act as intermediaries and use specialist trainers and consultants as the picture is so unclear.

Is anyone else as confused as I am?

Article here

HMRC Checker here
  • #polkadotconsultants
  • #learning

Introducing Barry Wall

"Business should be exciting and fun, consequently, I'm serious about what I do, just not…

Comments (1)

  • 10 months ago

    Dear Barry- an interesting post. I just completed some work for a client in the public sector, essentially undertaking an audit of contract staff and then classifying them as to whether they sat inside or outside IR35 legislation. Importantly as of the start of the tax year, liability had shifted to the end client from the contractor, hence the sense of panic within the public sector. Rumour has it that this liability will also shift to the client in the private sector as well in the next couple of years. Typically the public sector seemed to be taking a risk averse stance- with a number of contractors moving onto the payroll as a response. You raise a good point about intermediaries as well. I can't see interim posts in organisations falling outside IR35, as by their nature typically they fulfil the role of substantive posts, albeit on a temporary basis.

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