One of the most important determinants of IR35 status revolves around the extent to which a client controls where, when and how an individual performs his work.
Are you under the direct control of your client?
In most cases where professional services are provided, it is important that a contractor can demonstrate a certain amount of autonomy in the way they undertake a project.
Employees are typically under the direct supervision and control of their employers, however the truly self-employed will have more influence over how they complete the work they have been hired to do.
In the case of IT contractors and consultants, the client is likely to provide a fairly detailed specification outlining the tasks it requires the contractor to complete. However, for IR35 to not be an issue, the contractor should be presented with specific milestones or tasks to achieve, rather than being provided with an open-ended pile of work.
For a contractor to successfully demonstrate that they are not under the direct supervision and control of the client, both the written contract and working practices must show that the client has no influence over how the contractor performs his services, nor the manner in which they are performed.
Control – things to look out for
Contractual pointers towards a classic ‘employment scenario’ include:
- Indicating that the contractor will be supervised by a line manager, or similar company employee.
- Including work start and end times, and even break times in the contract.
- Including any ‘staff’ perks, including provisions for holidays or sickness.
- Any clauses that specify any rights of control or supervision over the contractor.
It is worth noting that any clauses related to control must be mirrored in both the upper tier contract (between agent and client) and the lower tier contract (between contractor and agent).
- IR35 contract template resources for contractors
- IR35 – Mutuality of Obligation
- IR35 factors – how to be compliant
- IR35 – In business on your own account
- IR35 and the importance of working practices
- ClearSky Accounting - specialist support for contractors
- Visit Hiscox for Professional Indemnity and Business Liability Insurance
- Contractor Finance - up to £30,000, when you need it
- InTouch Contractor Accountants - Personal Online Accounting
- Join PCG - Free impartial start-up advice for contractors.
- Visit Qdos Consulting for tax investigation cover and IR35 insurance.
- 90% Pay Retention for Contractors - Helix Management Ltd