An employer will try to make sure that his employees have a continuous supply of work and will also expect the employees to carry out the work when he requires. A self employed person will do the work he is being contracted to do and will finish with no expectation of further work.
When work is regularly given and accepted over a period of time, HMRC may take the view that employee status has been created by custom and habit.
Although mutuality of obligation is a key determining factor surrounding IR35, it is worth noting that HMRC’s lack of understanding and misinterpretation makes it difficult to mount a successful defence on this test alone. Currently, much focus is being placed on non-mutuality of obligations during the contractual term and, as such, it is important that a contractor has the right to walk away from a contract early, if they so choose. Also see Right of Dismissal.
If no clear end date is included in the agreement, and there is no explicit non-mutuality of obligations clause, the contract will likely fail an assessment. If there is no end date, it may be appropriate for certain contracts to terminate upon the completion of the
IR35 Compliance Guide.
Services – this would be acceptable in cases where the contract is based on clear deliverables.
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