Upper-level contracts
If you’ve engaged a client via an agent, there’s a chance you could be part of a chain of contracts. The contract between you and your agent is the “lower level contract”, and the contract between the agent and the end client is the “upper-level contract”. Both contracts need to be taken into consideration when determining IR35 status: if you don’t, there’s a risk the upper-level contract may contradict the lower level contract, undermining your determination.
Before the off-payroll legislation change, gaining access to the upper-level contract was near impossible for consultants and contractors. It contains commercially sensitive information and isn’t often shared. However, with off-payroll and the onus being placed on the client to provide the determination, the upper-level contract is likely to be considered when an SDS is issued.
What is the intention of the parties?
Put simply, the contract should always state clearly that you will be entering into a supplier/client relationship, rather than one of employee/employer. For example, the nature of the work should be documented clearly, in as much detail as reasonably possible.
Officeholders and IR35 status
If you accept an engagement as an officeholder, there’s a high likelihood of being ruled inside IR35. An office holding role is broadly defined as a significant role that has longevity, which you can be appointed to, and someone following you can be appointed into it. For example, any director role is an office holding role, and thus you are more likely than not to be inside IR35. The rules around this are complex and if you’re in this position you’re best to take third party advice.
Using your own equipment
Using your own equipment is a minor factor, and is often inflated on the IR35 grapevine into something more significant than it is. It’s fine to use a computer provided by the end client – in many cases, security policies dictate this as a mandatory requirement. However, if you do have the opportunity to use your own equipment, do so as turning down the opportunity could be detrimental to your status.
If practical, you may wish to consider pushing hard to use your own equipment. This means you can invest in better hardware and software than that provided to the client’s employees. Not only will you benefit from high performing equipment, but it is a very physical everyday reminder to others that you are not an employee.
Also, giving shifting paradigms in IT security (bring your own device, zero trust, cloud hosting) it’s likely to become more achievable than ever before to use your own equipment.
