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Right to Control
If you genuinely wish to be considered self employed and therefore outside IR35 you strongly need to consider the degree of control the client has over your working arrangements. If the client has too much control you could be considered a disguised employee and therefore inside IR35.It is important to address the issue of control when agreeing contract terms and conditions as these dictate day to day working arrangements. The most important thing to ensure is that the terms and conditions do not imply a relationship of master and servant as this would certainly make you a disguised employee. Also consider control along with other clauses such as the right of substitution and Mutuality of Obligation.
If you have just secured a contract or you are thinking of going into business with your own limited company call Commonwealth Contractors now on 0800 294 4388.
Right to Control
The important thing to understand is that it is the right to control that matters, you do not necessarily have to demonstrate control in day to day working arrangements therefore agreeing suitable contract terms is very important.Control has four main aspects:
- What work is done
- Where work is done
- When work is done
- How work is done
If the client has significant direct influence over all four the relationship is likely to be considered one of employment rather than self employment. It is normally unrealistic to think that you are going to have control over all four aspects as at the end of the day the client is the customer and they ultimately decide what service they require and how they would like it performed. However, if one or more of these aspects is missing, the issue of control is unlikely to be a conclusive factor.
What work is done
If the client has control over what work is to be done then it is quite a strong pointer towards employment.
For example if you go into business and provide helpdesk services it is more than likely the client will have control over what work is to be done as you are simply responding to whatever work needs to be completed at a particular time. If the client tells you to look at the server or fix a workstation on a particular day, you do it. The client is also likely to have control over what work is to be completed where you form part of a coordinated team, responding to issues as and when they arise.
To maintain control over what work is to be completed it is a good idea to define specific deliverables which once completed can be signed off by the client. This way you are not responding to work as and when but delivering a service defined by specific project milestones.
With support services, even though a contractor may be responding to client requests, there is a big difference if e.g. the request comes from eg a client employee who is user of an IT system turning to the contractor as an expert to help them, rather than from a client employee who is a manager and is directing the contractor as a subordinate.
Where work is done
If you are genuinely self employed there is a good chance that at least some project work can be done remotely. If this is the case it is a good idea to ensure that the terms and conditions reflect this fact. This helps to show that you are not obliged just to turn up at the client’s offices each day to work on what is assigned.
When work is done
A self employed person is more likely to have freedom over when work is to be completed. It is therefore a good idea to ensure the terms of the contract allow for flexible work patterns.
How work is done
Control over how work is done may be a strong pointer towards employment.
