Lawspeed has assisted literally thousands of contractors, interim managers and freelancers. Here are some real-life examples of how we have helped some typical clients, identities have been invented, but these are accurate examples:

Mr White

Mr White’s company was engaged through an agency as a project manager for an engineering company. The objective was to complete a specific project but his contract made him sound like an employee of his client because his position was described as a role and no mention was made of the project objectives.

When Mr. White contacted us we quickly ascertained that the work was in fact project based. We then performed a contract review, which revealed that the contract resembled a contract of personal service and contained a poor description of the services to be performed by Mr White’s company. We advised Mr. White that if the contract were redrafted to properly reflect the actual relationship between the parties and the discrete nature of the services it would be possible for the arrangements to be evidenced as outside the scope of IR35.

Mr White instructed us to redraft his contract and negotiate the changes with both the agency. Once we had completed the actual redraft we undertook the task of justifying the amendments and explaining to the agency that they were not exposed to any additional commercial risk. After successful negotiation including discussions with the client Mr White is now safe in the knowledge that the contractual relationship between his company and the agency properly reflects the arrangements, and is not likely to be subject to IR35 liabilities.

Mrs Red

Mrs Red operated as a non executive finance director of a quoted company. Her company also provided finance related software services. At the time she approached Lawspeed her contract terms did not distinguish the roles and was confusing as to the responsibilities of the parties, leaving Mrs Red’s company exposed not only to commercial risk but also to argument that the arrangements were caught by IR35.

Lawspeed undertook a review of the actual working arrangements and all documentation including engagement letters and invoicing. We then drafted and provided a project framework agreement enabling Mrs Red’s company to properly control the undertaking of software design and supply, with testing procedures and maintenance provisions, which effectively limited risk and clarified the operating terms including use of shared equipment. At the same time Lawspeed provided a non executive directors agreement separating work as a non exec director from the supply work. In addition Lawspeed advised on invoicing procedures and format. The result was that the parties were happy that the arrangements were properly reflected and Mrs Red’s company has significantly reduced the risk of IR35 applying.

Mr Blue

Mr Blue was unsure about his IR35 status so he went to the Revenue to get an opinion; they considered that he was operating within IR35, following which Mr. Blue contacted us. We asked Mr Blue to send us the correspondence with the Inland Revenue, a copy of his contract, and some information about the actual working practices. Mr Blue’s case was good and the contract contained a good description of the services and appropriate provisions including a substitution clause.

As such we felt we could respond to the Inland Revenue’s letter with a detailed legal analysis of the agreement in light of the contractual terms and actual working relationship between the parties. The Inland Revenue said that in light of the new evidence and the detailed rebuttal of their arguments that they had reconsidered their opinion and now felt that the engagement was outside the ambit of IR35. This whole process took two months from our initial letter to the Revenue’s change of opinion, saving Mr.Blue a considerable amount of confusion and payments of IR35 tax

Miss Green

Miss Green was an interim manager acting as a temporary finance director for her client. She wanted a contract that reduced her liability for her actions whilst she was acting in this capacity subject to the stock market rules. Her client had no suitable terms available and had told her she should produce her own contract.

After contacting Lawspeed and received advice she was able to discuss her working arrangements further with her client and ascertain the limitations of her work, enabling the engagement to be structured as a project. At the same time she was able to negotiate the limitations on her liabilities. Once the negotiations were ended Lawspeed drafted the contract which both parties signed.

Miss Green ended up with a contract outside IR35 and limited liabilities.

Mr Brown

Mr Brown obtained an engagement directly with a leading insurance company and contacted us as he was concerned about the contract that he was being asked to sign, and he was keen for it to be true reflection of the actual engagement between his company and the client. We suggested that Mr Brown ask the client if they would be amenable to his company providing its own form of contract and informed him of the nature of the contract and how it would be structured. The client agreed in principle and Lawspeed was instructed to supply a suitable agreement to suit their needs. This contract was accepted without question. Mr Brown continues to provide services under this contract with a range of clients, with confidence that his commercial liabilities are limited, and his IR35 status strongly improved.

Mr Pink

Mr Pink called Lawspeed and said that he was owed £12,000 by his agency. On checking the contract, timesheets and invoices Lawspeed ascertained that the agency was not justified in withholding any payment and, upon checking with the client, that the agency had already received payment from its client. Lawspeed served an insolvency demand on the agency. Rather than be wound up the agency decided to make payment, and the contractor then received £12,000 with interest within 14 days. Mr. Pink ended up “in the pink” at a cost of less than £500.

recent Revenue cases...

Neil

In February of this year Neil was referred to Lawspeed by the Abbey Tax Helpline following a request by the Revenue for Neil to complete one of its compliance review questionnaires. Lawspeed performed an initial prospects of success analysis in order to determine the merits of his case and provide him with expert feedback on his chances of succeeding against the Revenue. The prospects indicated there were a number of weaknesses in Neil’s actual contractual documentation, including a lack of a clear project basis to the contract and the presence of various control clauses, Neil had also been working for the same client for extensive periods and work was agreed largely on an on-going basis.

Lawspeed assisted Neil with preparing supporting information in response to the questionnaire and in addition Lawspeed sought and obtained input from the client evidencing the actual working practices where they conflicted with the documented contract terms. Following submission of two questionnaires responded to by Lawspeed, Neil subsequently received a letter from the Revenue conceding that the balance of the evidence did not indicate that IR35 applied.

Key factors in this case included in practice a lack of control by the client, the ability to substitute the worker, long hours worked, provision of own equipment and parts of the services were carried out at Neil’s own premises.

Neil's comment: “Many thanks for your expert help and guidance!"

Adam

The Revenue indicated that it would like to conduct an employer compliance review of Adam’s company records in the middle of 2003. This was handled under the PCG’s original ‘Route35’ by the previous representatives. By February 2004 the case was re-assigned to Lawspeed. Lawspeed consultants undertook their own fact-finding exercise to verify key aspects of the various engagements. A key factor for this case, which was discovered during an initial discussion with Lawspeed, was that even though the service provided was on the face of it a ‘support role’, which had been on-going for eight years, there was in practice zero commitment on behalf of Adam and his company, significantly weakening arguments that (a) the client could exercise control and (b) there was mutuality of obligations.

In light of the arguments presented in this subsequent correspondence the Revenue concluded that the IR35 legislation would not apply to this work. This opinion was based on a number of key factors including limited amount of client control, significant expenditure on equipment and rectification of work in Adam’s own time, right to substitute, ongoing advertising in the yellow pages and the intention of the parties at the outset that the engagement be one of self-employment.

Mark

Following what was thought to be harmless Employer Compliance Review, Mark received a list of numerous questions regarding working practices. This initial visit in early March 2004 was handled under the PCG’s original ‘Route35’ by the previous representatives, however the case was transferred to Lawspeed in May 2004. Following a fact-finding review of the evidence to be able to properly represent the facts of the case Lawspeed wrote to the Revenue. This was met by a request from the Revenue for permission to contact the client direct. Lawspeed requested documented input from the client as a statement setting out the actual working practices and relationship between the parties. Having obtained this strong documented evidence in October a response was received from the Revenue concluding that the engagement will not be subject to the “intermediaries” legislation.

This decision was based on a number of vital factors including the genuine project-basis to the work, the absence of substantive direction and control by the client, a right to substitute subject only to reasonable criteria relating to the skills of the replacement, there was no restriction on providing services to other clients and Mark' company would be responsible for rectifying any mistakes at its own cost.

Mark was delighted and said: "That is very good news indeed! I am very grateful, and as you can imagine the relief was like a huge weight off my mind. Many thanks again, to you and James May for your help and advice in bring this matter to a successful conclusion”

Alastair

Alastair originally contacted Lawspeed for assistance in March of this year, having received a letter from the Revenue with a number of questions regarding the real working practices. With Alastair’s input, Lawspeed drafted a response to the Revenue’s numerous questions relating to IR35. Months later Alastair received a further letter from the Revenue with additional questions wishing to clarify the working practices. Lawspeed took its client’s instructions and furnished the Revenue with pertinent supporting evidence.

During September Alastair received the great news that the Revenue have found him to be outside IR35 and notifying him that they were concluding their investigations. Key features of Alastair’s case included: parts of the services were performed from Australia, worked for a number of clients at the same time, clearly defined project, no set days to be worked, often worked outside the client’s core hours and was required to put in additional hours, but received no extra pay due to unsatisfactory work. Lawspeed was also able to establish a notable bank of evidence to demonstrate the genuine business enterprise that Alastair was running, including business plans, training and development records, company brochure, minutes of meetings, insurance cover and dedicated business area.

"That’s great!” Alastair said about his win, “Thanks for your help on this guys, I would have no doubt dropped myself in it if not given appropriate guidance! Thanks again.”

Lisa

Lisa originally came to Lawspeed for assistance approximately ten months ago. A firm of solicitors had previously advised Lisa, with regards to her IR35 case with the Revenue, but had been unable to progress the case to Lisa’s satisfaction. She decided to turn to Lawspeed to provide expert assistance in concluding her case quickly and efficiently. Lawspeed immediately performed its prospects of success analysis in order to determine the merits of her case and provide her with expert feedback on her chances of succeeding against the Revenue. It was found in this analysis that her prospects were high, with a number of lines of attack and useful evidential items, including a discrete project basis to the contract, clear intention the relationship is one of self-employment, a right of substitution and a requirement to rectify any defective work.

After collecting various significant pieces of supporting evidence and in particular vital client input as to the working practices, Lawspeed sent a rebuttal letter setting out its arguments as to why it believed Lisa’s engagements were outside IR35. This letter provided evidence from the contract provisions, case law and various working practices. Following receipt of the rebuttal letter, the Revenue indicated it would like to meet with both Lisa and the end-client. Lawspeed advised Lisa not to converse to the Revenue directly and in addition requested the Revenue did not contact the end-client. This was so as not to prejudice her case and to prevent any damage to her chances of obtaining future business. All questions were requested to be put in writing. Lawspeed provided critical assistance with the response that was prepared to these questions and delivered to the Revenue. After receiving this information and supporting arguments the Revenue conceded that Lisa was not caught by IR35. Key factors of this case included little control by the client and a strong commercially enforceable right to substitute the worker.

Lisa was of course delighted and commented, “Thank you so much for all your perseverance and assistance in getting this resolved. I really appreciate it (and will most definitely recommend your services to any colleagues who find themselves in similar circumstances in the future).”

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