What are the determining factors of IR35 status?
There are a number of factors that need to be considered in order to assess the IR35 status of an assignment, none of which are determinative on their own. The key factors that impact on IR35 status are as follows:
Personal service/substitution
- Is the contractor obligated to provide their services personally?
- Does the contractor have an unrestricted right to send a substitute (subject to necessary qualifications and experience to carry out work)?
- Is the contractor responsible for sourcing and paying the substitute (has this been exercised)?
- Does the client have the right to refuse the substitute?
- Is the right to substitute legitimate?
Control
- How – Control over the manner in which the work is completed?
- What – Working on a project or role? Can client move work?
- When – Choice over hours? Need consent for time off? Any restrictions?
- Where – Choice over where work is carried out?
Mutuality of obligation
- Is the client obligated to provide work?
- Is the contractor obligated to accept work?
- Is there an obligation to work out termination periods?
- Can the contractor finish up once the work is completed?
- Is the payment based on time or body of work?
Other Factors
- Is the contractor treated or do they act like an employee? (e.g. access to employee benefits, facilities, functions, performance bonuses, line management, appraisals, rolling contracts, business cards, org charts etc.)
- In business on their own account?
- Carry financial risk?
- Own equipment Intention of parties?
- Confirmation of arrangements?
How do I know that an IR35 status is set correctly?
To ensure that an IR35 status is set correctly, you should appoint an expert to assist you. As well as offering contract and permanent recruitment services, Corecom Consulting offers a fully insured compliance product, its services and education, free of charge. We’re passionate about hiring the best IT talent but also making sure we, our clients and our contractors are ahead of the curve in legislative compliance.
Corecom IR35 Connect is our comprehensive compliance solution for contractor hiring businesses. It consists of three key, connected services that insures your business against any potential tax liability, reduces contractor management and administration and limits the strain of contractor cash flow:
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IR35 Protect
A fully insured, client facing, online platform for Status Determinations protecting all parties in the supply chain.
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Corecom Projects
A project/product solution, based on deliverables and milestones, wrapped up in a single Statement of Work managed by a Technical Engagement Manager for your contractor recruitment
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Corecom Payroll Outsourcing
The option to outsource the payroll of your direct contractors, removing your “Fee-payer” tax liability and improving your business’ cash flow.
Book your demo
Don’t just take our word for it – book a demo today to discuss your specific requirements. We’ll show you how easy it is to use our online platform for your Status Determination Statements.
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