Contractors' Questions: Are client changes to my work an IR35 pointer?

Contractor’s Question: In terms of IR35 what does ‘Control’ entail? I’m interested because while the content and nature of designs/work I create and produce are entirely my company’s decision, their final appearance is sometimes tweaked by the client, sometimes for the better but often for the worse.

In other words, whether I agree with my end-user’s influence or not, the client sometimes interferes with what the final appearance/function of what I supply them is. As a result, could it be argued by HM Revenue & Customs that I don’t have ‘Control’ over my work-supply?

Unfortunately, my contract falls silent on the issue of whether the client is permitted to amend or interfere with the lasting/public appearance of what I supply them. Having broached the subject, a client representative has told me that they are permitted to make such last-minute amends – she said something like, ‘after all, you could supply a design that is completely nonsensical and we’d just have to run with it.’

My contract does not explicitly say the client is barred from ‘sticking their oar in’ over my work as its supplier, but it does say that they don’t have the expertise to produce such work – a statement that they often reiterate to me verbally. Who’s right and what does this all mean for IR35?

Expert’s Answer: Control for IR35 purposes concerns what you have agreed to do, when and where you will do it and how it will be done.  The more of these elements that you decide the better, but having control over what and how are the most important.   

You should take great comfort from your client not having the expertise to do the work and the fact this is stated in your contract and reiterated verbally. By not having your expertise they cannot tell you how to do the work. 

Yes, they may have a say in the final appearance but this is no different to any professional agreeing a design brief and then altering it to keep the client happy. You are in control of what you create and produce for them.  The client’s approach is one where they have the right to make sure the designs/work you have produced is fit for purpose, but it seems that your contract and the client’s view of your expertise is ticking all the right boxes for a lack of control and an outside IR35 position.   

The expert was Kate Cottrell, co-founder of employment status advisers Bauer & Cottrell.

Monday 24th June 2013