Understanding IR35 Control: Key to Contractor Classification

Diamond Pay Solutions: Simplifying IR35 for Contractors 

Navigating IR35 regulations in the UK can be complex, particularly when it comes to determining your IR35 status as a contractor. Control is arguably the most crucial factor influencing this classification. 

What Does Control Mean in IR35? 

To be considered outside IR35, the level of control exercised by the client (end hirer) over you, the contractor, must be demonstrably less than what would be expected in a traditional employer-employee relationship. This signifies a degree of autonomy in how you complete the contracted work. 

In a genuine business-to-business relationship, the client wouldn't typically exercise the same level of control over a contractor as they would over a direct employee. 

Maintaining Control Over Your Work: Key Areas to Consider 

It's crucial that you, as a contractor, can demonstrate independence from the client and maintain control over several aspects of your work: 

• How: Do you have the freedom to decide how you complete the assigned tasks? Client-imposed restrictions on how the work must be done suggest an employment relationship, potentially placing you within IR35. 

• When: Do you have flexibility in determining your work schedule? While reasonable deadlines or milestones are expected in most contracts, having specific working hours outlined indicates an element of client control. 

• Where: Who dictates your work location? A requirement to work exclusively on-site at the client's office might be indicative of an employment relationship. Ideally, the contract should allow flexibility regarding your work location. Can the work be completed from your own office or another remote location? 

• What: Does the client have control over the specific tasks you undertake? The ability to decline work that falls outside the agreed project scope strengthens your position outside IR35. You shouldn't be seen as an interchangeable resource at the client's disposal. 

While some level of client guidance regarding the work is inevitable, to be classified outside IR35, the degree of control shouldn't mirror that of a typical employer-employee dynamic. 

Additional Considerations for IR35 Classification: 

• Performance Reviews: Are you subjected to regular performance reviews by the client? 

• Equipment Provision: Does the client provide the necessary equipment for the job? 

• Work Schedule Definition: Are your working hours and days clearly defined in the contract? 

• Time Off Authorization: Do you need to obtain client approval before taking time off? 

• Exclusivity Clause: Does the contract contain an exclusivity clause restricting you from taking on other work? 

• Management vs. Managing: Are you considered "managed" or "managing" others within the project? 

High Control = Disguised Employee Status? 

A high degree of client control over your work suggests you might be classified as a "disguised employee," essentially treated the same as a regular employee for tax purposes. To solidify your position outside IR35, demonstrating autonomy and control over how you complete the project is critical. This requires careful examination of both the contract itself and your actual working practices. 

Diamond Pay Solutions: Your Trusted IR35 PartnerThe most conclusive way to determine your IR35 status is to have a qualified IR35 specialist review your contract and working practices. Diamond Pay Solutions offers expert assistance in this area, including recommendations for potential contract improvements to strengthen your position outside IR35. 

Contact Diamond Pay Solutions today to learn more about our comprehensive IR35 services designed to ensure your compliance and peace of mind within the UK contracting landscape.