This is a guest contribution by REC business partner Brookson One.
As the response to the COVID-19 outbreak continues into Autumn, and with the implementation of the Off-Payroll Working Legislation (IR35) looming on the horizon, Brookson Legal looks at whether working from home can strengthen a contractor’s IR35 status.
Working from home is an accepted reality for a lot of people in 2020. As end clients and hirers negotiate the government guidance regarding ‘COVID secure’ workspaces and seek to continue operating during ‘local lockdowns’ a significant proportion of the UK workforce remains at home. Will this have a material impact on an IR35 Status Determination? The answer to this, as with all IR35 Status Determination questions, is entirely subjective. The argument that there isn’t ‘Control’ when contractors work from home is certainly an intriguing one, but how does that stack up in practice?
Brookson Legal Service’s recent experience in assessing determinations with our clients has certainly considered the impact of home working, but in most cases clients tell us that that they are directing workers – permanent staff and contractors – to work from home. The contractor’s position is not strengthened in this regard as they do not retain the discretion to determine where to work from on any given day and they are being treated in a similar way to the permanent employees.
For remote working to be a strong indicator supporting an Outside IR35 Status Determination, the contractor should be free to determine where to work from and make demonstrable use of this practice, i.e. choose where they work regardless of any other factor including a global pandemic.
On the evidence we have seen so far, contractors do appear to have more options open to them in terms of where they work from, but ultimately still fall under the control of the end hirer who can direct the contractors to recommence working from their site or office at their own discretion.
Making an IR35 Status Determination requires assessment of a series of ‘indicators’ which must be taken into account before arriving at a conclusion. On the evidence that we have seen so far, the fact that contractors are now being seen to work from home is unlikely to mean that a role which was previously determined as Inside IR35, will now fall Outside IR35. As it is always the case with IR35 determinations, the elements of control should be considered amongst other indicators and should not be taken as a ‘silver bullet’ for IR35.
End hirers however, may want to consider reviewing previous Status Determination Statements (“SDS”) to account for contractors working from home in order to help reduce queries and challenges, if previous determinations stipulated that the Contractor was primarily site/office based and the expectation is that ‘normal’ office based work will not resume again ahead of the April 2021 introduction.
Brookson Legal would recommend clients exercise caution regarding IR35 Status Determinations and would always recommend consulting with a sufficiently qualified and experienced Legal Services provider to understand the intricacies of the Off-Payroll Working Legislation.
Our team of specially trained legal professionals, regulated by the Solicitors Regulation Authority, has more than 20 years of IR35 experience, and will work with you to make sure the IR35 status of the contractors you engage with is properly assessed on a contract by contract basis, helping you prepare for April 2021 and implement the right systems and processes so this becomes BAU for you from then on out. Contact us now to find out how we can help.
This article was originally published by Brookson Legal.