Brookson’s experience in dealing with independent contractors enables us to provide tailored tax advice to our customers, whatever their profession. We also offer expert advice on employment status and IR35 with the support of Brookson Legal Services.
Discussions with HMRC have helped us develop advice in relation to IR35 and provide guidance on items that should be taken into account when deciding your IR35 status. It is important that you find out whether IR35 applies to each assignment you undertake. Some job specific IR35 considerations are available below:
General Sectors
Architect, Architectural Technician, Benefits Assessor, Clerk of Works, Document Controller, Engineer, IT Consultant, Manager, Site Inspector, Trainer/Teacher.
Health Sector
Care Worker, Doctor, Laboratory Technician, Occupational Therapist, Pharmacist, Pharmacy Technician, Physiotherapist, Psychotherapist, Social Worker.
General advice if you are not listed above
- Ensure that your contract accurately reflects the project or body of work you are engaged to work on.
- Make sure your client thinks of you as an independent consultant and not simply an extension of their workforce.
- Invest in your company by supplying your own tools and equipment for the work you undertake. You should also undertake and pay for professional training courses to ensure that your skills are up to date and applicable for the market in which you work.
- Demonstrate that you are treated differently from your client’s employees - both in terms of the services you provide and how you perform them. Different pay and benefits will not be enough on their own. Flexible working, assignments for other clients, investing in your own training, development and equipment, working on a specific package of work for a fixed fee and/or a fixed period are all good ways of showing that you are truly independent.
- Provide a substitute as this will not only provide you with unequivocal evidence that you are not obliged to offer a personal service, and therefore cannot be a disguised employee, it can also enable you to profit further from the assignment by supplying cheaper labour to perform the services on your behalf.
- Undertake project based assignments rather than period based assignments.
- Work for multiple clients and invest in your own company to demonstrate that you are in business of your own account. The more clients you work for, the easier it is to demonstrate that you are self employed, whereas only having one client as your sole source of income for a lengthy period may suggest that you are employed by the end client. To counteract this, pay for your own training, provide as much of your own equipment as possible and advertise your services in trade magazines or the Yellow Pages.
Advice if you were previously employed with the client
- Sections 210-219 of the Employment Rights Act 1996 states that continuity of employment is preserved where the break in services is less than one week.
- The longer the break between being employed with the client and returning to provide services the easier it will be to demonstrate that you have not simply returned to the client as a disguised employee.
- Ensure that the new position is very different to the role you previously performed as an employee.
- Breaking any connections with your previous role by having a different reporting structure, different contract terms, different method of charging for your work (e.g. by charging a fixed fee plus VAT) and having a separate contract for each project or body of work you undertake, will all demonstrate that your role with the client is very different.
- It is essential that the services you provide as an independent consultant are as distinct as possible to the services provided as an employee.
- Having a break from the client and working for other clients will demonstrate that you are in business of your own account and that you have not simply returned to the client as a disguised employee.
- Ensure that you tender for the assignment and quote fixed fees up front where possible to distinguish how you secured the assignment to how an employee would be offered a role.
- Ensure that there are no employees doing the same work as you. Otherwise you will need to distinguish between your work and that undertaken by the employee(s).
