Inside IR35 or outside IR35 – 16 factors that show whether you are

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Inside IR35 or Outside IR35
Inside IR35 or Outside IR35

Inside IR35 or Outside IR35

Are you inside IR35 or outside IR35?

According to the Special Commissioners when you are appealing against a HMRC decision that you are caught by IR35, there are 16 factors which will point to whether you are or whether you aren‘t.

IR35 Burden of Proof

As in almost all other appeals the burden of proof in an IR35 appeal is on the appellant. That means that it is up to the appellant to show that HMRC are wrong and that one should not consider the worker as an employee of the client.

A number of factors are relevant, therefore, but none is conclusive.

Relevant IR35 Factors

Some relevant factors include:

(1) how one calculates the payments for the work; whether this is by the volume of work or by reference to the number of working hours;

(2) whether the worker gets payment for sickness and holidays and what the pension arrangements are;

(3) whether the worker’s absences have to have approval in advance;

(4) whether the client can control what, where, when and how the contractor does the work;

(5) whether the worker must do the work personally or whether he can provide a substitute;

(6) whether the worker provides his own tools and equipment;

Part and Parcel of the Client’s Organisation

(7) whether the worker is part and parcel of the client’s organisation;

(8) whether the worker occupies a post (such as General Manager or Secretary) in the client‘s organisation;

(9) whether the worker has a job title in the client‘s organisation;

(10) whether the worker works continuously for the client or whether the worker has a series of engagements;

(11) whether the worker hires his own employees;

(12) whether the client is obliged to offer work and whether the worker is obliged to do the work;

Working for Other Clients

(13) whether the worker works, or can work, for other clients;

(14) whether, and under what conditions, the contract can be terminated by the client;

(15) whether the worker assumes any financial risk; and

(16) whether the worker has an opportunity to make a profit on his own account

Therefore, are you inside IR35 or outside IR35?

So, how many did you get on the tick list?

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For all critical IR35 news and advice for contractors click on IR35 News.

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