fb-pixel
Information

Retain your control as a contractor to keep IR35 at bay

Avatar
Written by Caunce O'Hara
Last updated November 25, 2019

Control is one of the three key points that is used to determine whether a contractor is working inside IR35 or outside IR35.

The three main pointers are:

Supervision, direction and control

– The degree of control your client has over what, how, when and where you complete your working day?

Substitution

– Are you required to carry the work out yourself?

Mutuality of Obligation (MOO)

– Is your client obliged to provide you work, and are you obliged to complete it?
Regardless of whether you work as a contractor in the public sector or the private sector, you will need to be able to demonstrate that these points and working practices are compliant to IR35 legislation if you are subject to a HMRC IR35 investigation.

An additional point that is also heavily weighted in the CEST tool is how you are paid. If you are paid weekly or monthly for your contract, then that is likely to be viewed as working inside IR35.

In this article we look at supervision, direction and control

If you are an end-client and you exercise control over how a contractor performs the work they are contracted to complete for you, then you are at risk of placing that contractor inside IR35.

Supervision means that you are closely supervising a contractor’s work, which can include stringent checks by an employee of the end-client before the contractor can move on to another task.

Direction – Someone providing direction to a contractor will often coordinate how things are done and how the project progresses.

It can be argued that both supervision and direction are necessary in some sector, especially those heavily regulated such as financial institutions, to ensure compliance is adhered to.

Control can, for example include insisting on a contractor conforming to methods laid-out by the hiring party, such as: “We don’t do it like that, we insist on you working to our methods.”

Control can also mean an employee having the power to move a contractor from one task to another as priorities change. In short, the autonomy of the freelancer/contractor is removed.

In short, the freelance contractor should retain control over how and when they work, not the end-client. If you find yourself in the situation where you do not have control over how and when you work, then you could find yourself working inside IR35.

A contract review can identify such an issue as well as identifying other indicators for working inside IR35. This could then provide you with an opportunity to discuss changes to your contract and/or working practices with your end-client to ensure you are compliant and working outside IR35.


If you would like to speak to one of our IR35 experts about your IR35 status, please contact 0333 321 1403 for details and to book an appointment.


Related IR35 content

6 Questions you need to ask yourself about IR35

The fundamentals of IR35 are NOT changing: understanding the key status indicators – personal service, control, and mutuality of obligations – is…

Read more

The impact on contractors of the deferral of private sector IR35 reform until April 2021

Since Steve Barclay, the Chief Secretary to the Treasury announced a 12-month delay to the IR35 private sector reform in…

Read more

Why do I need an IR35 contract review?

If you are a contractor with any doubts as to the compliance and validity of your contract in relation to…

Read more

How does HMRC define a PSC?

IR35 – or the Intermediaries Legislation – was introduced by HMRC in 2000, and was aimed at individuals who were…

Read more

What is IR35 and how does it work?

IR35 – or the Intermediaries Legislation – was introduced by HMRC in 2000, and was aimed at individuals who were…

Read more

What is a contract review and do I need one?

A Contact Review is a report that independent tax specialists such as Markel Tax provide to contractors giving an opinion…

Read more

IR35 changes 2021: What you need to know

The Government has reaffirmed plans to make changes to off-payroll working (IR35) rules effective from April 2021. The main principles…

Read more

What is inside and outside IR35

There is no statutory definition of a contract of service (employment contract) and therefore we must look to the courts…

Read more

Will contractors still need insurance for IR35 after April 6th?

Amendment: On March the 18th 2020, the Government announced that the roll-out of private sector IR35 reform would be postponed…

Read more

What is IR35 and how will it affect you as a freelance contractor?

For many freelancers, IR35 sounds like another jargon term that has no relevance to them and there is a concerning…

Read more

The Right of Substitution

The right of substitution is one of the key tests of your IR35 employment status as set out by the…

Read more

Mutuality of Obligation (MOO)

Mutuality of Obligation refers to the obligation of the employer to provide work and pay for it. This is combined…

Read more

Retain your control as a contractor to keep IR35 at bay

Control is one of the three key points that is used to determine whether a contractor is working inside IR35…

Read more

Why do I need an IR35 contract review?

If you are a contractor with any doubts as to the compliance and validity of your contract in relation to…

Read more

The importance of an IR35 Contract Review for private sector contractors

If you are a private sector contractor, you should be fully aware of the private sector IR35 changes that are…

Read more

What is IR35 and how does it affect you?

This Partner Programme is offered by our partners at Caunce O’Hara Insurance Brokers Limited. To find out more please visit…

Read more

PSCs inside IR35 – Keep Calm and carry out some research

A week on since the Finance Bill 2017 became law public sector contractors who operate through PSCs are facing a…

Read more

IR35 Products & services

Caunce O’Hara’s partnership with Markel enables us to offer a broad range of IR35-based products to protect contractors, fee-payers and end clients across the UK.

IR35 Hub Related IR35 content