IR35 exempt still?

[Denny]

I've just started a contract with a global end-client through an interim manager EB. The contract has been reviewed and negotiations with the end-client contact b2b agreed with some conditions attached - like using the end-client templates when required. I am keen to remain outside IR35 this time round, which is why I started my own limited.

However, now I've started on site it seems that I'm being drawn into a culture of 'personal service' type conditions instead of being viewed as an 'outsider' to do a job. Although I can work from home and come and go as I please without client control being evident, it is clear that other considerations have emerged that could threaten my IR35 status.

I have been issued with a corporate laptop (to use the network), a security pass with just my name on it (no company name) and the end-client site issue all contractors (including me) with a hospitality allowance to use the staff canteen and so on. I didn't expect anything like that to happen. Nearly all the project team I am engaged to work to are from a management consultancy employee consultants and are trying to draw my into a team spirit social and cultural cohesive behaviour too - asking me out for drinks after work and so on. I am keen to just go in when I have to, get the job done and then go home. To me that is proper b2b arrangement - not having a psuedo employee type relationship with other contractors on site and using the staff canteen etc.

If I just don't use the facilities and pretty much come and go as I please, do you think that is still enough to remain exempt if I am ever investigated or would the fact I was offered these facilities to begin with shatter any chance of being viewed as exempt? I am also doing odd bits and bobs for other clients when I have the time, have full substitution rights and my contract is sqeaky clean from being IR35 incorporated (Qdos checked it out).

Your views would be appreciated. This situation has not worried me int he past because I was always through a brolly so it didn't matter whether I was controlled by the client or not or entered into a team-spirit like situation.

I would also appreciate it if some of you would give me some tips on how to handle myself in this situation and how they handled being drawn into a potentially IR35 compliant situation. I don't want to be seen as a wet blanket or unsociable, but my instincts tell me to keep my business activities distinct from any social add ons that suggest that I'm being judged on my personal characteristics as well as my ability just to do my job - particularly if the staff facilities are included in the arrangements. When I work directly for private clients, I don't get drawn in like this, so I don't see why this should happen here either.

[privateeye]

If a thief offered you stolen goods and you declined are you still guilty of receiving them – i.e. your client is offering something you do not want?
Does anyone who gets invited to a drinks get taxed apart from VAT?
Is it not a case that your client is entertaining you to keep you and it is a business expense on their part? You are a guest on their premises and most people look after their guests.

My old client was HMCE who treated me to drinks and a subsidised restaurant – and this was with the most outside IR35 Contract I’ve ever had - so it's OK for the Government to do this and keep you out of IR35. Social drinks are nothing to do with HMRC and are outside the contract. There is no rule that you cannot make friends in business.

True that HMRC do not apply logic to IR35 cases but also true that they lose most of them.

[xoggoth]

I don't believe being able to use the canteen and so on are terribly relevant to IR35, as PE says, these things are often available to anyone companies have business with. Passes and networks are necessary security. Why socialising should be relevant I have no idea.

[Pondlife]

I'm in a similar situation, in that my current client is pushing for 'one team' i.e. all working together. There is nothing wrong with enjoying client hospitality (this is common place in a lot of industries) . It doesn't change the T+C of your contract i.e. you have a business relationship, you don't get paid when not on site, you screw up and fix at your own cost, substitution etc etc. Working within client security requirements is a given these days. I've never seen a client that would let me log on to their network with my own PC - it doesn't happen anymore. You can have a supplier - customer relationship and still enjoy the odd free bar, just don't join their employees only gym!

HTH
PL

[Denny]

I'm in a similar situation, in that my current client is pushing for 'one team' i.e. all working together. There is nothing wrong with enjoying client hospitality (this is common place in a lot of industries) . It doesn't change the T+C of your contract i.e. you have a business relationship, you don't get paid when not on site, you screw up and fix at your own cost, substitution etc etc. Working within client security requirements is a given these days. I've never seen a client that would let me log on to their network with my own PC - it doesn't happen anymore. You can have a supplier - customer relationship and still enjoy the odd free bar, just don't join their employees only gym!

HTH
PL

That's clarified things a bit more. However, I am still concerned that staff facilities are built into my pass access rights. So it's not a case of being treated as an occasional guest by a well meaning and generous client. It seems to be a right of passage that comes with the entrance pass and has over £3 food allowance on it too per day. For that reason, I don't intend to use it. The only comfort I have is that nearly all the project is made up of large contractor (the management consultancy) employee consultants and other freelancers and we all have access to these facilities. I thought that using your own equipment and not using the staff facilties was an intricate part of the exemption pointers though. Perhaps that is only the case if the staff were normally only allowed to use them, but an exeption is made with the occasional contractor?

At least I can come and go as I please and don't need to ask permission provided the work is done. However, I still fear that the IR would conclude that I was simply a high level and more privileged pseudo employee who can work from home as can most top executive employees. However, I don't have to work set hours per day or on certain days of the week - so perhaps that helps.

Thanks for your input all.

[Pondlife]

I wouldn't worry about the staff canteen - it's open to all on site as is mine. The sales rep who turns up for a meeting is allowed and he's not a pseudo employee!! It's about how you do the work!

HTH

[malvolio]

Not a big energy company by any chance?

Anyway, the peripheral things like canteen usage and having to use client-provided equipment to link to the network come under the heading of "grasping at straws" these days.

The fact you set your own hours and location, presumably define how you do your work and presumably have a sub clause in your contract all point to a fairly clear IR35 pass. If you really want to be certain, join the PCG, if you haven't already, (actually, do it anyway, it's only £200-ish a year) and talk to the experts there.

And don't worry about the out of hours thing, it is still important that you are known by people. If you are getting free drinks out of Accenture, that's their loss not yours!

[css_jay99]

While on this subject, a query of my own.

I got my current contract via a friend that works at the same place
The company initiated a project, normally the procedure would have been for the company to approach agencies to get contractors in for the JOB

But my friend (who was previously a contractor himself with his own Ltd Co.) managed to tell his employers that he could get people in to do the JOB, so I guess him acting as an Agency/company required to do the Job

My contract has got all that substitution ....stuff. He maintains to me that the contract I have signed with him makes me outside of IR35. Giving all confusing stuff that I have read in the last couple of days, I am not so sure what my position is.

I get a daily rate and contracted to work 8 Hrs a day OR 40 hrs a Week.
To a large extent, I am not controlled of fed how to do my Job but I guess I have deliverables according to deadlines.

If I get behind on my work, I guess I will have to do it in my own time (in/out of employer’s site) and I certainly have not been paid for any overtime either.

Am I caught by IR35?


css_jay99

[The Master]

As always, when it comes to the crunch it's your working practices that count and no amount of fancy clauses in the contract will change the fact that you are pretty well sunk if HMRC go to your client report and he/she says: "well, css_jay99 turns up at 9am every day, goes home at 5pm and in between does whatever I tell him to do".

[meridian]

"...... and in between does whatever I tell him to do".

Is this strictly speaking complete, though?

Contractors are usually expected to do what the client tells them; in my mind, the differential is that although the client tells the contractor what needs to be done, the actual process of how it is done is left up to the contractor.

How does this work with tradesmen? For example, if I hire a builder for some work in my bathroom and then keep him/her on for additional bits and pieces for six months (conservatory here, reroof there....) at what point if any does the builder stop being an independent contractor and become an employee?