IR35 News - in, out, shake it all about

When are you caught by IR35 and when are you not? A recent tribunal case JLJ Services Limited v HMRC (2011) looked at an IT contractor and decided his status changed during the period under review. 

John Spencer had worked for Allianz Cornhill Management from 2000. But by the end of 2003 the relationship had changed from renewals for specific projects to annual renewals, and he moved from contract to employee

The tribunal commented on the type of situation where they consider the contract worker analysis to be realistic as one where: 

• an individual has a particular area of expertise;
• that area of expertise is one that he has found has not enabled him to gain full time employment;
• the explanation for not gaining full-time employment is that the area of expertise is likely to be one that various companies might need, but not on an indefinite basis, but rather simply to complete a particular project;
• the type of work for which the worker is engaged is likely to be work outside the core work of the business.
• the individual has only been able to gain work through rendering his specialist expertise available through placement agents;
• the past pattern of work has confirmed all the above points of short engagements with different companies, and many unwanted gaps between engagements;
• the area of expertise is likely to be one where the client would indicate the project to be done, and the hoped-for time frame for completion of the project, but would not expect to be able to supervise or “control” the worker in any way, simply because the expert would be engaged to do something outside the expertise or competence of the company; and
• the company engaging the individual, engaging him for a project, would consider it quite inappropriate to provide holiday pay, pension benefit, and the other normal incidents of employment because they would all be inappropriate for such contract workers.