Q. With IR35 reform on the horizon, I’ve been doing some thinking about what it means to provide a service that legitimately belongs outside IR35, which is where my contract currently sits. Whilst I realise that IR35 status isn’t always clear cut, I know that being able to demonstrate that I am not controlled by my client is important when working outside IR35. However, because we are answerable to our clients, as contractors are we ever really in control of the engagement?
A. What matters is that you’re able to evidence that your client does not have the right to control how you perform the work. However, you do raise an important point and one that contractors who are looking to safeguard their IR35 status should take into consideration. It’s true, to an extent your client will likely have an element of control over what service you provide (it would be impossible for them not to), but that’s not to say they should control how it’s delivered, along with when and where from, for example.
As you mention, IR35 status isn’t always black and white, with Talksport presenter Paul Hawksbee’s recent IR35 loss evidence of this. However, there are several ways that you can show either clients, agencies or HMRC that your engager isn’t in control of the working relationship.
For example, it’s important you’re able to prove that you aren’t answerable to a manager or supervised, in the way that an employee is likely to be. You should be free to carry out your work as your wish, without the client dictating how you provide your services.
This includes your working hours – you shouldn’t be restricted to working your client’s so-called ‘office hours’, nor should you be prevented from taking breaks as and when you decide to. Additionally, in theory, your client shouldn’t be able to tell you where to work from, assuming that you’re able to carry out your work remotely. Furthermore, your client shouldn’t have the right to move you from the piece of the work that you have been contracted to perform to another without your agreement.
You mustn’t be subject to performance reviews like employees are, and you shouldn’t be prevented from carrying out your services as you see fit. It’s vital to evidence this in the written contract, which must be mirrored when providing your services on a day-to-day basis.
To recap, are contractors ever in full control of the working relationship? To a degree, but clients certainly aren’t. And whilst the client can accept or reject the work delivered, that’s not to say they should have any direct control over how you provide your services – a characteristic of an outside IR35 contract that can be evidenced in a number of ways.