Ever wonder if paying for your own equipment as a contractor is an indicator of IR35 status? Or perhaps you’ve wondered exactly what indicates too much client control in a contract? With the private sector IR35 reforms only weeks away, now is the time to be getting answers to these and other off-payroll working questions.
Thankfully, that’s where Kingsbridge can help, as we put your IR35 questions to our very own Head of Tax, Andy Vessey. Andy really is the font of all knowledge when it comes to IR35 and has been involved with the legislation since it was introduced way back in 2000. In that time, he’s defended over 500 IR35 cases against HMRC – and he’s won almost every single one. So, he really is the one you want to ask about anything regarding IR35. Read on for this week’s questions and to find out how to submit your own…
I am a client of Kingsbridge Contractor Insurance and I work as a Field Engineer for a major client for operations and maintenance. Could you please tell me, if I pay for my own travel, tools, and insurances, would I be likely to be caught inside IR35? HMRC’s assessment suggested I wouldn’t be. Your opinion would be appreciated.
As your PSC is meeting these expenses then it indicates a level of financial risk that your company is taking on, but this would depend upon the level of expenditure incurred. If tools are being purchased to undertake the work specifically for your end client, then this could be a strong indicator of self-employment. However, if these are only small, generic tools, then this may not be influential in arguing that you provide your own equipment.
Do remember that there are other status factors to take into consideration, the most important of which are right of control, personal service (including right of substitution) and mutuality of obligation (MOO). Although having one of these factors in your favour could be enough to place your contract outside of IR35, more than one would certainly see you the right side of the IR35 fence.
I have a question about client control, specifically choosing your working hours and place of work. Would a contract that states that the contractor works five days per week and that the place of work is the United Kingdom with business trips abroad for meetings as required, be considered by HMRC to have too much client control? Many thanks in advance for your help.
If the end client is dictating the actual working hours and the precise location as to where you have to work, then this would suggest there may be a sufficient degree of control being exercised over you. Ignoring the ad hoc overseas meetings, if there is scope for you to decide what hours you work each day and where you work (an actual address more specific than just the country), then this should be sufficient to refute such a suggestion. This could even swing the argument in your favour, albeit that there are two other aspects of the right of control test that have to be considered: are you told how and what to do by the end client? These factors must be taken into account as well to ascertain a better picture of your status.
How to Ask Andy
You might think it would be tricky to ask a high-ranking expert like Andy an IR35 question, but you couldn’t be further from the truth. It’s incredibly simple to Ask Andy, just follow this link and fill in the form. Andy will answer as many questions as he can right here on the Kingsbridge blog.
But with 6th April 2021 right around the corner, you shouldn’t just be asking questions. Instead, you should be actively preparing for the IR35 reforms to ensure your SDS is an accurate reflection of your contract and working practices. While preparing the SDS is your end client’s responsibility, that doesn’t mean you can’t communicate with them to help them make the right decision.
One way you can do this is to point them in the direction of the Kingsbridge IR35 Status Tool. For just £50 plus VAT, you and your client have access to a unique hybrid IR35 solution, developed by Andy Vessey himself. The tool asks between 29 and 34 questions about your contract and working practices to gain an overall view of your engagement. It will then issue you with a determination and a comprehensive report detailing the reasoning behind it. If your case is borderline, it’s passed to one of our in-house IR35 specialists for review so that they can issue your determination and report once they’ve been able to examine the information. We’re currently the only team out there to offer this kind of solution, giving your client confidence in their SDS and giving you peace of mind.
