Updated: April 2020
To consider whether IR35 applies, there are four main tests:
Mutuality of Obligation
Here, they determine whether the organisation is obliged to provide work and is the individual obliged to accept the work offered?
Under this test, they will look firstly at the written contract, if any, and then what at what happens in practice.
This test looks at the power to decide what, when and/or how the work is carried out. The greater the organisation’s control, under a contract or in practice, the more it indicates employee status.
This means that the individual agrees under the contract to carry out the work or services personally and cannot send a substitute instead.
Ask yourself, if you ignore any intermediaries or contract(s), would the individual be like any other employee (e.g. full time, part-time, fixed term or casual)?
So, What Next?
Now that we’re head-on into the new year and April is fast approaching, Stephen Foster, Legal & Professional Service Manager at Vista has recorded a short video with some tips on what you should be thinking about before the legislation kicks in:
You’re probably also thinking about using HMRC’s online CEST tool. When using this, be prepared that you’ll need to provide some very specific answers.
To help, we’ve put together a questionnaire for employers to complete first. Answering the questions we’ve put together will help you to consider your specific relationship and IR35, and will go a long way to helping you to use that tool more effectively.