IR35

[bobjugs12]

Does anybody know much about this aspect of law?

[Count-A-Strong]

Bob, this looks like it gives a step by step guide:

http://www.freelances...-and-contractors.aspx

[bobjugs12]

Nope, still none the wiser count :(

[237SJ]

Isn`t it something to do with preventing tax avoidance by contractors?

[bobjugs12]

Yeah it is 237. I want to know if a certain company is behaving in contravention of the law, and what rights the employee/contractor has?

[237SJ]

Sorry might not be much use but if you google ir35 law there is a website called contracteye that comes up and explains things (can`t do clicky)

[bobjugs12]

I'm checking out all the sites, but the situation I need info on is very unique and I can't find any information on it's intracicies which was why I was hoping there might be an expert on here

[crystalbee27]

we've been sub-contractors for years so if you can give a bit more info (this site is totally anon) then it may be more helpfull -are you the contractor,subcontractor or employee?

[bobjugs12]

It's not me this is about, (it's about a mate I did my training with) but I will type it as if it is because I know the company and situation quite well
I'm the contractor/employee. I work for a private company on a 4on/4off basis. The company is contracted by the government to fill in shortfalls in coverage.
The 'employees' of the company all have self-employed status, yet the company dictates when we can/cannot take leave; who we work with; where we work; and everything else. They make it clear that anyone not following the party line will have their shifts cancelled without any notice or warning; and have in the past got rid of people for questioning why invoices were taking months to clear.
Essentially we are treated as employees when it suits the company, then treated like outside contractors when it suits them.
The company provide all the vehicles, uniforms, equipment and some training.

Where do we stand legally. The staff know that this is illegal, but due to the companies attitude of getting rid of anyone who dares question them we are scared to do anything about it. If HMRC came into the company and checked the books who would get nailed. Us or them?

TIA

[crystalbee27]

this info relates to the construction industy so may not be totally appropriate to your situation but some basics are the same
As a self-employed person - if you are contracting or sub-contracting you have control of your hours and rates. You say when you can work and when you can't and you do not have a contract of employment.
To qualify for SE status you must provide your own tools and safety equipment but are allowed to drive or use large plant ( JCB,360's,forklifts ) that belong to the company you are sub-contracting to as long as you have the relevant CITB and 'tickets to use that Plant. this does not include a company vehicle to get to or from work or to carry out your work.
You usually have to provide your own clothing or safety equipment though is is common practice for sites to provide hi-vis and hard hats even for SE contractors. not sure on the law if you are for example a self-employed security guard then i think it would be normal for them to provide a uniform.
Really reading your post i think you all know that you are technically 'employees" and need to know who is in the wrong. Well - if the IR come a knocking on your 'employers' door and find they are in effect 'employing' and not subcontracting it is them well and truly up the swanny because they are avoiding paying employers contributions , not collecting tax from wages and not providing what they should for their workers. As long as you are paying class 4 NI and filing a self-employed tax return you should be ok. You may have to prove you are not working exclusively for this company -easy if its building work -just get a few 'invoices' from jobs you've done for mates - if its a service industry it may be a bit more tricky to prove you are getting SE income from different sources -to recap -they have more to lose than the workers however the IR may close down the firm or they may lose their gov. contract and in that case everyone loses
HTH

[bednobs]

isn't that what self employed contractors are supposed to do? Work at the whim of the employer? If the employer is contracting jobs out then surely it's up to them to state how where and when they want the employee to work, and if the contractor dosen't like it, they can refuse?

[crystalbee27]

@bednobs how can a self-employed worker work at the whim of their employer -they are not an 'employee' they are self employed.
The self-employed person offers their services at a rate agreed by both parties and at places and times to suit. they do not get a wage they put in an invoice stating what they have done and how much it has cost. If you asked me to build you a garden wall and we agreed on a price then when I arrived for work you said <sorry I want the garden wall at my mothers house and its gonna be 10 ft longer >-then i am not at your whim to go do it - i would politely say that i would have to give you a seperate estimate as its a seperate job -then charge you travelling time for a wasted journey ;-) If you were minted and i was your employed handyman -you paid all my NI and PAYE and gave me paid stat holidays and the same scenario happed then I would doff my cap, say of course missus, then curse you behind your back , but I would still have to go do it lol!

[jaydah]

"...You will generally be an employee, and not self-employed, if the economic reality of the relationship is that you are not in business on your own account, or in ordinary language, ‘Are you your own boss?..........."

http://www.yourrights...y-employment-law.html

The 'employer/contractor' can be taken to Tribunal. IR will audit company accounts and act accordingly with fines or closure of business.

[bednobs]

hmm, but in this situation, the person is their own boss surely - i.e. if they don't want to do a shift they simply say no

[bobjugs12]

Bednobs, if the 'employee' says no, then the company no longer uses them. Effectively they lose their job.

[crystalbee27]

thats the whole point bednobs - they say no , and then they don't get anymore work-they are off the job, sacked in effect. they are being treated like employees - but have no benefits such as paid holidays. it is against the law to use self-employed people on a regular basis as if they were employees. companies do it because its cheaper -if I employ someone i have to pay employers NI contributions as well as them -if i deduct 140 pounds off my employee in NI contributions, then I have to pay the same amount to the government out of my profits. I can understand what you are saying though - its a very grey area and even experts beg to differ so we have no chance lol!

[crystalbee27]

@jaydah -exactly - is is harder for the contractor to hide the fact he is regulally paying the same set of SE workers, than it is for them to prove that the SE person`s ONLY source of income is from one contractor -so they go for the easier target. Its a grey area though

[bednobs]

i am really still not getting how it's illegal - sorry :)
lets say i am the "employer"
Surely i would want to offer more work to those people who are reliable and who fill my shifts? I don't really have any incentive to offer more work to people who regularly don't want or turn down the shifts i offer them, therefore if i have enough people to cover the shifts i need i simply don't bother to ask those people any more.

[jaydah]

You use manpower for a job they give you a bill for work done = they are SE & you are a contractor.

You regularly use manpower and control their working hours for your benefit; you are the employer and subject to Employment law.

[jaydah]

Its not a grey area for IR as IR exist to claim monies for Gov. If employees dont pay IR claim from the easier target, the employer.

[jaydah]

http://www.hmrc.gov.u...ment-status/index.htm

Lots here: look under Employed or SE and Casual workers.