Freelancers' Questions: Does being bound to the client site affect IR35?
Freelancer’s Question: A freelance colleague has been advised in an IR35 contract review to change his contract from “agrees to provide services to the client at the site” to words akin to ‘agrees to provide services from a site of the supplier’s choice.’
As I also operate outside IR35, should I similarly ensure that the supply of my services is not confined to the client’s site? I presume that being able to choose where I supply services from would be a pointer away from ‘control’ and therefore helpful in cementing my outside IR35 status.
Expert’s Answer: Control is one of the key tests in determining IR35 status and it encompasses what, how, when and where.
In reality, location has become a largely neutral point with regards to IR35. Nevertheless, it is always helpful if a contract shows that any location has been mutually agreed between the parties and that there is some flexibility on the freelancer’s/contractor’s part.
Naturally, many projects will necessitate constant access to the end-user’s site and systems and therefore it wouldn’t be feasible for the freelancer to work elsewhere. If this is the case, it would be helpful if it was made clear in the contract or schedule, so it didn’t appear that the end-client was simply dictating where the services were to be provided.
There is some relevant case law. The 1952 case of Stagecraft Ltd v Minister of National Insurance revolved around a variety comedian -- the fact that the theatrical producers could move him from production to production was a key factor in determining that he was working under a contract of employment.
However, far more pivotal in determining IR35 status is the ‘how’ part of control, i.e. the freelancer’s method of work.
The expert was Seb Maley, a director of Qdos Consulting, an employment status advisory.
Read more about ‘Control’
and implications under IR35 in this FreelanceUK article, written by SJD Accountancy.