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Much has been made of the need to have an IR35 "friendly" contract. What many have overlooked is the need to have an IR35 "friendly" work description, without this any contract may be useless in escaping IR35. If the engagement is for a genuine project then this should be clearly described in the schedule. If the work is ongoing and cannot be described as a project or series of discrete tasks then no matter what the contract says it will be difficult not to be caught by IR35. In order for most contractors to escape IR35 it is necessary to move away from the time and skill-set model towards a project and deliverables model. A clearly defined project with deliverables will result in no 'mutuality of obligations', as the contract will be for the project and nothing further. Such a description will state at the outset what is to be done and the services should not be subject to variation by the client. Services outside the initial project description or ad hoc consultancy should only be undertaken via a separate agreement. In most cases the client will not be exercising control over how the contractor performs the services, as it is for their expertise that the contractor has been engaged. A correct schedule and work description is key to compilation of a contract that evidences operations outside IR35.
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Disclaimer- This article is for general guidance only and is not a substitute for professional advice where specific circumstances can be considered. Whereas the greatest of care is taken in providing this information, neither the author nor Lawspeed can accept any liability for any action taken or not taken in reliance upon the information provided in this article. |
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