Failed IR35 Review - QDOS

[Lance]

Interesting doc that. I haven't seen it before so will have to have a good read but some things really jump out in there. The Case 9 example appears to completely destroy the possibility of any coders working in an agile environment being outside, and I guess they'd try and extent that to anyone working agile. Very scary one that one.

But back on topic. I don't think either of your examples are as black and white as you put them and I'd disagree on both of them.

Re Subbing in to SC. I think it's totally possible, even with the big suppliers that are proper businesses, that providing an SC cleared sub in time isn't practical so the client would accept a sub in theory but the practicalities mean it won't happen. I don't believe this scenario necessarily makes it one of personal service and can be argued in court. I applied for a gig at the Bank of England quite awhile ago and queried an inside determination and they said it was because they can't accept SC subs. I applied for another gig last year which was outside, I queried the same point and they said because subbing was largely impossible due to the security aspect it didn't need to be considered for IR35 in that case. A pretty common sense argument.
I am sure TCS and other outsources out there have people on SC gigs that can't provide a seemless sub as that guidance advises but there is no way their engagement is personal service.
When it comes to SC I think there is a pretty good case for overlooking subs, particularly if the client says we would but the security process imposed means we can't.

I don't think your second statement is anywhere near right either. I think the fact you keep getting called back because you hold expertise in that area and happen to hold SC doesn't mean you are a pool. I'd say that's more a niche business offering. A pool would be people and not businesses meaning the engagement type wouldn't be that of a pool, it would be a contract to deliver a service. That's very different to having a number of temps you can call back in whenever you need. If you do look at it in more detail the fact they send the same person back is in the best interests of the client and the business providing it so is good business, not pooling. I think your definition is a bit askew here and again easily defendable in court.

I am sure in situations like this HMRC are not going to try nail someone an a disguised employee just because the nature of the engagement, i.e. high security, create a need for a slightly different engagement to standard... well I think they'd try but they can't win a normal investigation let alone an SC one.

All that said I am sure there are SC roles that are truely inside and all the above isn't the get out of jail free card for every SC gig. I just think failing them all on this topic isn't right.

IMO the only way of proving any of the above is by someone taking it all the way. We've nothing concrete to go on.

Interesting that the document has only three outside examples.

One of which is out of scope due to umbrella payment (Ref 3).
Another is outside due to a sub having been used (ref 10).
Leaving ref 4 as the only thing left to most of us.

As for devs working in a team.... to my mind that's always been very questionable, agile or not. I doubt that the author even knows what agile is, and a waterfall project in a similar team isn't going to help IMO.

[Paralytic]

As for devs working in a team.... to my mind that's always been very questionable, agile or not. I doubt that the author even knows what agile is, and a waterfall project in a similar team isn't going to help IMO.

This. Example 9 is interesting, but that role being inside is nothing do with the process/methodology/framework being followed.

The agile description of what the developer does has also been carefully worded to show direction and control.

For example, in Scrum, the PO does not give tasks to the team. The PO defines the backlog and priority, and the team (and individuals within that team) select the stories based on that priority.

Control exists in terms of being given tasks to complete from a list prioritised by the Product Owner.

[LondonManc]

This. Example 9 is interesting, but that role being inside is nothing do with the process/methodology/framework being followed.

The agile description of what the developer does has also been carefully worded to show direction and control.

For example, in Scrum, the PO does not give tasks to the team. The PO defines the backlog and priority, and the team (and individuals within that team) select the stories based on that priority.

Working on Scrum means that you have no Control is an interesting one. You still have full control over how you deliver something - developers decide what goes into the sprint in order to achieve the sprint goals set out by the PO. I'd therefore say you have more Control than under waterfall, where the detailed design is already written and signed off.

[malvolio]

Generally speaking SC - or any clearance requirement - can be ignored for IR35 since it applies to everyone. If you can offer a properly and currently cleared substitute that meets the client's security needs (always remembering that clearance criteria vary with the role) then it should not mean that an RoS is impossible. However...

The Rule is "reasonably unfettered" - "reasonably" has a clear meaning, there has to be a good commercial (i.e. not policy or simple unwillingness) reason not to accept the offered worker, such as lacking a relevant technical ability, and "unfettered" means it's not subject to an onerous approvals process beyond checking suitability (e.g., "we won't accept one anyway"...).

And, of course, the subbie has to take over the whole existing contract and all its Ts&Cs in its entirety, and not just be subcontracted to do some element of the contracted work.

Actually doing it is the golden bullet, the right to do it, providing is it genuinely reasonably unfettered*, should be a golden bullet but is easily side-lined if you don't meet the above criteria.




* A case was lost some years ago when the client's HR manager said in court that although there was an RoS clause, the client would not accept a subbie under any circumstances. And was allowed to get away with that breach of contract law by te judge.

[BlasterBates]

The problem with agile is that the contractor's workload is dependent on what is placed by the Product Owner in the Kanban board. This makes him fully integrated into the team, as the contractor is interchangeable with any other developer in the team.

In order to act as a contractor outside IR35 there needs to be a seperate board or set of tasks defined and carried out by the contractor.

This is one thing that struck me when I first started working agile, that control is exerted by the board and its priorities, you no longer have your "area" in the past you would have been given a longterm task lasting several months.

[cannon999]

Are there any actual real cases of IT contractors being investigated and found inside?

That case study about agile being 'inside' looks completely ridiculous to me. So if the client controls what work needs doing - this means the contractor is inside? That sounds completely false. Who should decide what work needs doing then? The contractor?

[elsergiovolador]

In order to act as a contractor outside IR35 there needs to be a seperate board or set of tasks defined and carried out by the contractor.

The taxman still may say that the board is setup separately as part of the tax avoidance arrangement. I.e. if that separate board was integrated into the team's board, the contractor could still do the work. I think this could only count if the entire board was created at the time of signing the contract and just lists the tasks that are in the contract and contractor has a sole control over the board (client with read only access).

I also think that this is ridiculous but it shows the direction where the things are going. I can disagree with that, but the taxman with unlimited funds eager to lodge cases even when there is remotest chance of win creates chilling effect for both sides. When clients read such guidance, are they going to happily risk having a fight? That's why I believe most of work moving forward will be inside, even if that is outside in all but name, just to be "safe". The guidance also gives pointers how to ensure the contract is inside.

[malvolio]

Are there any actual real cases of IT contractors being investigated and found inside?

That case study about agile being 'inside' looks completely ridiculous to me. So if the client controls what work needs doing - this means the contractor is inside? That sounds completely false. Who should decide what work needs doing then? The contractor?

The classic reference is the guy who had a clear outside IR35 contract for several years, got complacent and started doing whatever was asked of him and had the contract from that point on classified (and taxed) as inside. You should only be doing what is defined in the schedule of work tied to your contract. Many agile-based jobs can't meet that requirement since the work itself changes over time, often (to my jaundiced eye) at random, as the wider requirement changes

These are not simple decisions and are emphatically not generalised statements of in or out. Every one has its own peculiarities.

Then again, the word "ridiculous" can only accurately be applied to the IR35 legislation. Everything else is simply random guesswork until it gets to court.

[LondonManc]

Generally speaking SC - or any clearance requirement - can be ignored for IR35 since it applies to everyone. If you can offer a properly and currently cleared substitute that meets the client's security needs (always remembering that clearance criteria vary with the role) then it should not mean that an RoS is impossible. However...

The Rule is "reasonably unfettered" - "reasonably" has a clear meaning, there has to be a good commercial (i.e. not policy or simple unwillingness) reason not to accept the offered worker, such as lacking a relevant technical ability, and "unfettered" means it's not subject to an onerous approvals process beyond checking suitability (e.g., "we won't accept one anyway"...).

And, of course, the subbie has to take over the whole existing contract and all its Ts&Cs in its entirety, and not just be subcontracted to do some element of the contracted work.

Actually doing it is the golden bullet, the right to do it, providing is it genuinely reasonably unfettered*, should be a golden bullet but is easily side-lined if you don't meet the above criteria.




* A case was lost some years ago when the client's HR manager said in court that although there was an RoS clause, the client would not accept a subbie under any circumstances. And was allowed to get away with that breach of contract law by te judge.

That sub-note is ridiculous. While we know that they can just bin you off at any moment despite the notice clause, it's one thing to have a commonly known flaw like that but something else entirely to have a clause that you have no intention of following.

[cannon999]

Whilst we are on the subject.. I have downloaded a template from QDOS which has 'total price for this contract' field. I am putting the following down:

'Estimated £xxx based on an assumption of 1760 billed hours between the commencement date and the expected completion date.

This figure is an estimate only. Ongoing billing occurs as per the hourly rate as detailed below. There is no obligation from the CLIENT to provide said amount of hours of work and there is no obligation from the CONSULTANCY to accept any work.'

Does that sound ok?