IR35 ADVICE FOR CONTRACTORS

Areas to think about

Points towards contract for services if…

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Can work be performed away from the employer’s premises?

Work can often be carried out at locations of the contractor’s choice.

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How much of the equipment used belongs to the employer?

Using little of the employer’s equipment and some of contractor’s own.

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Contractor works at regular times & places?

Work is agreed on a one-off and irregular basis.

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How is payment calculated? How are expenses recovered?

Preferably fixed fee specified service, not day rates, not hourly rates, and no retainer.

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How much control is exercised?

No other duties beyond the contract can be assigned. No right to control how the work is done.

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Who decides whether to take the work?

The contractor decides, employer can't insist.

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Can someone else to do the job?

Contractor has the right to substitute.

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Does profit depend on capacity to reduce costs & work effectively?

Separate accounting and payment of costs etc. by the contractor.

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Can the contractor be regarded as a part of the employer’s organisation?

No direct control by employer’s staff and not a member of an internal team.

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Is termination on completion of the task?

Termination on completion of task, not by notice.

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Benefits - Sick pay or paid holidays?

Not provided.

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Is the contract continuous?

A separate contract for each activity.

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Restriction on working for other clients?

There should be no such restriction.

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Is the contractor VAT registered?

Contractor is VAT registered.

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Contractor holds separate insurance?

Cover, especially professional indemnity held.

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Does the contractor have a Limited Company with a business organisation?

Limited company, own accounting, other clients, some work done on own premises, has other staff.

Intention to create employment contract?

No intention by either party.

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These are the underlying tests used to assess employment status for IR35 purposes. Since 2021, if your end client is a medium or large private sector business, they are responsible for applying these tests and issuing you a Status Determination Statement. If your client is a small business, you and your intermediary remain responsible for assessing these factors yourself for each contract

Registered office: 61 Friar Gate, Derby, Derbyshire, DE1 1DJ   T: 01332 202660

Adrian Mooy & Co is the trading name of Adrian Mooy & Co Ltd.  Registered in England No. 05770414

■ Engaging as Employee or Contractor ■ IR35 Status Review ■ Contractor Expenses Guide ■