What makes an IT contract role genuinely outside IR35?

As we approach the introduction of new IR35 rules, it’s important to ensure you are well-informed about how you may be affected. The rules can be confusing so it’s no surprise that myths and misunderstandings arise from time-to-time. Here we address some of the common areas of confusion.

All long engagements are caught by IR35?

This isn’t true. Your IR35 status has nothing to do with your length of contract and everything to do with how you work. So whilst there is no specific time limit that makes an assignment ‘inside’ IR35, it’s fair to say that the longer an assignment lasts, the more likely you are to adopt working practices akin to being an employee.

For example - if you’ve been in place for a number of months, you might find yourself included in the holiday rota or you may find there is resistance if you want to substitute yourself, both factors that would count against you remaining genuinely outside IR35. Our advice is to manage your working practices carefully so the original working practices remain in place and you don’t, albeit unintentionally, fall foul of the rules.

I have more than one client, so I’m ‘outside’ IR35.

Again, this simply isn’t true. Your IR35 status is determined by your contract and your working practices, so simply adding another client to your portfolio won’t automatically change your status. Indeed, you can be ‘inside’ IR35 for one client, and ‘outside’ for another, or both ‘inside’, or both ‘outside’. 

It’s certainly fair to say that if you serve several end clients simultaneously, or quickly move between assignments, then you’re more likely to work in a way that conforms to an ‘outside’ status assessment.  This is because you are likely to be less embedded in each organisation and your arrangement is, therefore, less likely to morph into an appearance of employment.

As long as my contract says I’m not an employee I’m fine?

Again, working practices are the thing you will be judged on, not the wording of your contract. The contract is important, of course, but it’s only part of the picture. The main consideration will be your actual working practices, whether you’re behaving like and being treated like a member of staff. Whatever your contract says, your working practices will hold more weight with a status determination expert or a tribunal.