Does working at the client's site affect IR35?

It is fair to say that the majority of contractors work on the client's site and usually for fixed hours. The Revenue always contends that these are factors of control and therefore points toward being inside IR35. 

They contend this on the basis of a case called Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance. When considering what constituted control, MacKenna J said: "Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done."

On the face of it then, the fact that the work is done on site means a pointer toward being inside IR35. However, the contractor would argue of course that the work has to be done on the client's site because, for example, that is where the equipment is.

In the Revenue's internal guidance manuals (ESM1019) the following advice is given to the Inspectors when considering this issue: "However, you should be careful about making a judgement concerning status where the nature of the work dictates where it should be carried out. In such cases, this factor is not likely to be of any significance in determining status." This important paragraph is always completely ignored by the Revenue in status disputes but is a powerful tool in overcoming their control arguments. 

Turning now to the fixed hours. Again the Revenue would have you believe that working says 9-5 is a strong pointer toward being inside IR35. This can be true, but very much depends on why you have to adhere to those hours. For example are there security issues which dictate when you can be on site, is the building closed outside these hours? For most contractors, I believe one of these two factors would apply. This being the case is it really a factor of employment? 

Again, the Revenue almost always argues strongly that it is, but buried in ESM1021 we have the following paragraph: "For example, if working on large sites where access is limited to normal working hours, the worker is not going to be able to work as and when he or she pleases. In such circumstances, the limitations put on when the work can be carried out tells us nothing about the status of the individual and other factors will have to be considered."

The paragraphs extracted above, taken directly from the Revenue's own Status Manuals quite clearly indicate that working on the client's site, for fixed hours, can play no part in determining whether a contractor is inside IR35. Any assertion of the opposite should be strongly resisted.

Article provided by SJD Accountancy.

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