This case, as the majority do, started off under the guise of an Employer Compliance Review. Our client's accountants dealt with the early stages of the 'IR35 Review' but after a year Qdos was asked for help because of our expertise and track record in this field.
Our client company undertakes control instrumentation and electrical engineering design and has particular expertise in the UK Atomic Energy field.
Our client company had undertaken contract work via an agency under a verbal agreement. This arrangement ended after 20 months when contracted direct, agreeing a price and signing a Consultancy Agreement.
A copy of a tender letter and the agreement were forwarded to the Revenue along with our client's Contractor Capability Statement (in effect our client company's CV).
Points in our client's favour were:
- Control over what has to be done and where (25% own premises 75% at end client), when and how.
- Right of substitution.
- No verbal agreement re termination.
- Equipment - usual office, computers, CAD programs, radiation dosimeters.
- Concurrent work.
- Subcontracting out of work.
- Not integrated into end client workforce.
Subcontract and substitute
We advised that our client company subcontracted work to meet deadlines. The IR response to this was "You state that the company has subcontracted work to meet deadlines but has not provided a substitute. Can you clarify please?"
The writer was tempted to give the Oxford Dictionary definition of subcontract and substitute but refrained and simply advised that had a substitute been used a deadline would not have been met, the work was subcontracted in order to meet the deadline. The Inspector replied within days advising the basis of opinion and the relevant factors considered and concluded that the intermediaries' legislation did not apply in this case.
The Director of the client company was naturally delighted with the outcome and grateful to Qdos for our help in bringing this to a satisfactory conclusion.
To date Qdos have handled over 600 IR35 cases saving millions of pounds in tax and are the UK's leading specialist on IR35 and Status Compliance issues.