Extra tips to help bolster your IR35 status, outside of the usual suspects

When people talk about an IR35 determination, they’re predominantly considering the major factors like Mutuality of Obligation (MOO), Supervision, Direction or Control & Right of Substitution, and for the most part it makes sense to. But there are other things to consider as part of your determination, so I thought it would be worthwhile to dedicate this article to some of the other factors you need to think about next time you’re looking for an assignment.

Having your own website: This is something that from the conversations I’ve had at least, not enough contractors have. And considering how much it costs to create and maintain a website, it feels like a lost opportunity. IR35 tribunal cases in the past have used whether a contractor has a website or not as part of their determination.

It is important that it is updated and used however, and can’t be something you just set and forget. It needs to be evidenced that it is essentially a part of the marketing campaign you use for your business.

Financial exposure: As a contractor you will want to be demonstrating that as part of your contract that you’re taking financial risks as it is useful to prove that you’re a business rather than a disguised employee. When a contractor completes work that the client does not deem satisfiable, if the contractor must rectify this mistake on their own time, then this is evidence of financial risk.

Business Insurance: Having business insurance is an indication that you are operating on a business-to-business relationship rather than an employer-employee relationship. By having business insurance it shows that you acknowledge that you are exposed to financial risk and are putting procedures in place to insure against this as a business.

Exclusivity: As a general rule as a contractor you should not be tied in to any exclusivity agreements that prohibit you from completing other work. Being restricted from working with other clients implies that the client has an element of control over your working practices, and whilst it’s not necessarily one of the larger deciding factors, it can certainly have a big impact.

Right of dismissal: It is usually the case that in a business-to-business relationship a contractor can’t be dismissed, however if they are in breach of their contract the end client can terminate their agreement. This is different to an employee-employer relationship in which the employee would be given statutory notice of the termination of their employment. It is worth noting though, that a notice period does not always indicate a contract of services arrangement. 

Employee benefits: As you operate on a business-to-business basis you should not receive any employee benefits such as pension, sick pay or holidays. Receiving them is a big indication that you’re operating on a contract of services basis, and are therefore a disguised employee.

Part and Parcel: The HMRC would argue that being part & parcel is when a contractor is so ingrained in an end client’s organisation that they have become part of that business. In a true contract for services arrangement, the contractor should be an accessory to a company rather than an integral piece of their makeup.

Hopefully after reading this, and if you’ve read the other articles around SDC, MOO & RoS you should have a clearer indication on what you need to do to continue working on an outside of IR35 capacity going forwards. As always, it’s definitely worth doing extra research on your own, after all, getting it right could be worth thousands of pounds per year.

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