Recommendations for keeping outside of the IR35 Legislation
You need to continue to operate as an independent business in the workplace where you are not under the client/end client’s control eg you can undertake the work as you see fit, as a specialist where the method of work shall be your own within the reasonable direction of the client.
The contract is to be carried out by your company (not necessarily you specifically), so your company will always have a right to substitute the worker within reasonable parameters.
Continue to have a series of limited individual projects each with a start and end date, so that there is not one ongoing contract. It is strongly advised that the contract is for the completion of a particular project, or have some form of deliverable that is consistent with a discrete piece of work that is not ongoing, rather than a general description for a fixed period.
Your company’s contract should contain a clause for immediate dismissal eg if the worker is found to be unsuitable, have a Right of Substitution cluse and there should ideally be a No Mutuality of Obligation clause.
Your company’s contract should NOT of course contain benefits for its workers such as paid holiday, paid sick leave and training courses.
General advice in managing your business so that you will be seen to be in business on your own account and therefore give an indication that you are operating outside of IR35 is listed below:
- Advertising and Marketing (eg in Yellow Pages/Press/Internet)
- Company actually having its own insurances (eg P.I.I., Public Liability/ Employers Liability/Sickness Cover).
- Company actually uses its own capital and equipment to carry out services
- Company spends money on training its employees
- Company enters into a contract for services in which invoicing is the method of payment
- The work is carried out at times and locations to suit you (not just the end client)
- Try and carry out work for different clients over the same period
- Try not to work alongside other employees of the end client’s /have the same line manager as them because the Revenue will view this as you having become integrated into the workforce.
- Try and employ other Consultants in your business if at all possible – this will give you an automatic substitute, regarding certain aspects of the work at least
- Make sure you have your own headed stationery/business cards
- Make sure you have your own office area/equipment/business telephone
- Show that contractually you are entering into risk eg with regard to correcting errors in your own time, using own capital and equipment
- Being registered for VAT
As specialists, we offer ongoing advice to our clients as well as fully written-up IR35 Contract Reviews.