Freelancers' Questions: Are my client's requests a red flag under IR35?
Freelancer’s Question: Is it detrimental to my self-employed status – and therefore a pointer towards IR35 - if, as requested, I attend a client’s company meeting, team-building day or induction? I’ve also heard from the client’s staff that I might be expected by the client to sign or read certain paperwork, such as a staff manual/ handbook, even though these documents are apparently only meant for the client’s permanent employees.
Expert’s Answer: Regarding team-building and company meetings, if the event is confined to members of the client’s organisation, then I would decline politely. It could be seen as an indicator that you, the freelance contractor, is regarded as ‘part and parcel’ of the organisation, especially if you also take part in staff meetings and receive staff materials/ manuals.
With regards to employee handbooks, these are not appropriate to external contractors and freelancers. You should only be offered an induction necessary to understand the work required together with any Health & Safety requirements. Other instructions, i.e. signing on at the site, name badges etc, should be the same as those relating to any external visitor.
Lastly, and the most unhelpful issue out of those you mention to demonstrating that you are outside of IR35, the signing of any document that specifically relates to an employee could indeed be detrimental to your self-employed status.
It does depend, of course, on precisely what the document in question is demanding. A Non-Disclosure Agreement, for example, could be seen as proper business governance so would not be an issue. However you should definitely avoid signing an employee template and only sign a similar freelancer/contractor-based agreement. If the client insists on the same form being used, then it should be signed by the freelance contractor “on behalf of the limited company.”
The expert was John Hill of employment status advisory John Hill & Associates.
7th November 2013