Might only working from home mean your contract belongs outside IR35?
Q. My question is regarding IR35 and the impact working from home may have on my IR35 status. Before the COVID-19 lockdown, I was assessed as being caught by IR35. I am still engaged in the same contract, but now, like many others, I only work from home. It’s likely that this will be the case for at least the rest of the year. Does working from home – and with it using all of my personal equipment, including my own premises – impact my IR35 status?
A. Where you carry out your work has a bearing on your IR35 status, but it’s highly unlikely that it will prove decisive in an IR35 case – or in your situation give you the grounds to transfer outside the legislation.
In typical circumstances, having the freedom to provide your services from where you choose – whether that’s from home or your own office – is useful in demonstrating that you do not fall under the direct ‘Control’ of your client and therefore could belong outside IR35. However, the fact that the vast majority of employees are also working from home when possible right now may mean this carries even less weight.
Should working from home and remote working become the norm in many businesses, how much of a role this will play in determining IR35 status going forward remains to be seen. With many employees able to work from home as and when they want, it might soon be the case that this becomes less valuable in distinguishing between a contractor and an employee. However, we’ll have to wait and see.
It may, therefore, be more worthwhile to focus on other aspects of your contract, that has led to it being classed as inside IR35. For example, consider additional elements of ‘Control’ – how can you demonstrate that you aren’t controlled by your client? Also, think about ways to show you do not provide a ‘Personal Service’ and ask yourself if ‘Mutuality of Obligation’ exists. These are the three most important factors to focus on when determining IR35 status. Where you work from, along with whether you use your own laptop and other equipment should be taken into account, but you won’t win an IR35 case on this alone.
So to recap, having the right to work from home or wherever you see fit should be factored into an IR35 assessment. That said, being instructed to work remotely by your client due to COVID-19 won’t be enough to shift your contract from inside to outside the legislation. Stand back and consider other more telling aspects of the IR35 rules.