Once you
have an IR35-friendly placement lined up, and have negotiated an IR35-friendly
contract to go with it, there are still points the wise Contractor will want to
watch out for, in order to remain sure of not prejudicing his/her IR35
status. The ultimate answer to the
question as to whether or not a contract falls outside the scope of IR35 is to
be found in the real world situation, of which the written contract itself can
only be a part.
Remember
that you need to present - and to continue to present - the overall
picture of a person carrying on business on his/her own account. One of the ways of helping to demonstrate this
is to be particularly careful to avoid appearing to be (and, more dangerously,
slipping gradually and imperceptibly into becoming) 'part and parcel of the
Client's organisation'.
Particularly
in a marginal situation, paying regular ongoing attention to these points may
make a key difference between pass and fail.
1.
Ensure you are and remain distinguished from
staff to third parties and other members of staff in as many ways as possible.
1.1.
avoid appearing on staff lists; keep a copy of any such lists, to show that
you do not appear on them
1.2.
do not use company or pool cars
1.3.
do not become part of a Client's
'performance review' or similar system
1.4.
do not join the client's share option
schemes or other rewards schemes (and if such schemes exist, keep a record so
it can be seen that you have not participated)
1.5.
wherever possible, be seen to choose your
own working times. Even if you have a
contractually specified weekly number of hours to meet, where you can, be seen
to choose for yourself the most appropriate times to visit and discuss matters
with the client. Keep copies of any
memos etc which demonstrate this.
1.6.
Timesheets: if
possible it may be preferable to use your own, on your own letterhead – and call
them ‘Work Progress Sheets’ and not ‘Timesheets’. Follow the agency’s or client’s preferred
format by all means, but it looks better if they are on your own letterhead.
2.
Have your own business card which shows your
business address and how you can be contacted.
Use it.
2.1.
avoid (like the plague!) accepting or using
any business cards which might suggest you to be part of the client's
organisation.
2.2.
act as a visitor or contractor rather than
as a member of staff - so far as practicable, follow the procedures for
visitors rather than for staff. For example, use a visitors pass or badge
rather than a staff pass. Keep copies.
3.
Where practicable, operate from your own
premises as often as possible
1.
Have a formal invoicing procedure and comply
with all other relevant regulations e.g. VAT, corporation tax, national
insurance contributions, company law requirements, local council
regulations. DO NOT cooperate in agency
self-billing arrangements - even if the agency operates such a scheme, always
raise and send your own invoice.
2.
Ensure that expenses are not reimbursed
through the Client's expense system - include them in your invoices to the
Agency. Or if you have to claim them
from the Client, at least give the Client an invoice for them.
3.
So far as practicable, avoid accepting
responsibilities for the actions of other persons within the organisation
(performance assessment of others, internal reporting on matters other than the
project, participating in disciplinary procedures, etc). (In the case of eg a Project Management role
this may not always be possible, but at least ensure the scope of your
responsibilities does not extend beyond the boundaries of the project you have
been contracted to manage.)
4.
Think twice before agreeing to do something
outside the scope of what you have been contracted to do. And if you do agree, put something on record
which shows that you have considered the point and that on this occasion you
have agreed - something diplomatic, but which nevertheless preserves the
evidence, and makes clear that you are not the Client's, to deploy as the
Client pleases..
5.
Avoid being included within a Client's
appraisal process, or being rewarded by reference to the Client's performance.
6.
Ensure that the physical evidence does not
suggest you are part of the organisation - do not allow yourself to appear in
the Client's telephone directory (or if this is unavoidable, ensure that you
are clearly shown in it as a consultant ).
Or at least send (and keep) a memo to the person responsible for the
list drawing their attention to the error and asking them to rectify it as soon
as practicable.
Now, I
don't say that failure to meet any of the above points would necessarily be
fatal - the absence of any one of the above will not necessarily mean that you
suddenly change from Pass to Fail status - but, taken together, they help to
build and sustain an overall picture which can only help the Contractor in
ensuring (s)he stays clearly outside the scope of IR35. And it's that overall view which counts.
It can be
easy as weeks and months go by to let some of these points slip - so do a regular
review of all the above points, and preserve the evidence - make notes of
your findings (and take copies of any documents which may help) - and keep them
in a file with your contract and any other relevant material, as part of your
business records, which can then be produced at a later date if necessary.
I'd really appreciate your feedback on this FAQ - so mail me and tell me what you think of it, if it's been useful to you, or let me know of any specific problem you have where I may be able to help.
[Return to Roger Sinclair's 'Welcome' page]
No liability is accepted for any inaccuracy in the information in these pages - see full disclaimer
© Roger Sinclair roger@egos.co.uk 2001 - All rights reserved - see full copyright details
The information on these pages is provided free and for information only, and is provided 'as is'. Whilst believed to be correct, it is in no way comprehensive. It is provided for your interest only and is not intended to be relied on as formal legal advice. The posting of information on these pages is not intended to create a lawyer-client relationship, and you should not act or rely on this information without seeking professional advice. No liability is accepted therefore for any errors, or for any losses that may be incurred if it is relied on.
You may read these pages on-line, and download them to read later, for
your own personal use.
This copyright notice must appear on every page that you print from here.
You must not redistribute these pages or any part of them in any form or medium
without first obtaining my consent.
You are welcome to set up links to this website from others.
[Return to Roger Sinclair's 'Welcome' page]