Contractors' Questions: Am I inside IR35 if the client pays for my hotel?
Contractor’s Question: I’m contracting for a car manufacturer as a PSC, via an agency, which pays my invoices. The manufacturer requires me to stay in a hotel (for two nights) so I can both attend meetings and work from an office (not my usual place of work) for two days. They have arranged the hotel already and so I think they must have paid for it. If they do pay for the accommodation, instead of me/my PSC, does it put me inside IR35?
Expert’s Answer: IR35 is a complex issue and open to many different interpretations. What all parties would agree on though is that whether or not you fall within IR35 depends on far more than one issue.
In the instance you describe, we would say that the client meeting the hotel costs is definitely not enough in itself to say that IR35 applies. What would be more important, if you’re looking at a single factor, would be to assess the level of ‘control’ being exercised by the client as to where you are being told to work, as well as the general level of control the client has over how you perform your duties.
Substitution is also important; so are you allowed to send somebody else to provide the services in your place? If yes, this is a very helpful pointer towards self-employment, but if not, the opposite is the case.
And do you provide your own equipment? Do you run other contracts concurrently with this contract? Do you employ any members of staff? Are you given the freedom to fulfil the agreed objective of the project in your own manner? These are just a few of the questions which traditionally need to be answered to help decide if the Intermediaries legislation (IR35) applies.
Therefore, to answer your question directly, we’d say that ‘no,’ the hotel being paid for isn’t a determining factor of your IR35 status – to gauge that, one would need to be in possession of all the facts surrounding your engagement and the nature of it including the day-to-day of how you work. With IR35, it is necessary to get the best advice you can; getting your status wrong could be very costly.
The expert was Marcus Green, director of Nova Contracting.