Personal Factors

There are a number of factors concerning the mutual intention of the parties involved which can indicate the IR35 status of your assignment.

‘Statement of Intent’
Most Contractor contracts will include a ‘statement of intent’ clause that confirms the assignment should not be considered to imply a contract of employment between the Freelance Professional and Hirer. Some Freelance Professionals wrongly assume the existence of such a clause automatically creates an IR35 Pass status. This is not the case and you should apply best practice by considering both your contract and the working relationship, seeking expert assistance if unsure.

Home Working
Some Freelance Professionals assume that if their assignment does not allow them to work from home, it creates an IR35 Fail position. If the Freelance Professional must work on site because that is the only way that they can access the Hirer’s computer systems and project team, and thereby deliver the service as contracted, then it is not a factor. But if a Freelance Professional can work at home, this can be a factor in favour of passing IR35.

Confidentiality Agreements
Hirer confidentiality agreements that specify the Freelance Professional by name, or are between the client and the Freelancer personally, do not affect IR35 status as long as the agreements do not conflict with the main contract between the Limited Company and the Hirer. Nevertheless, it is always advisable to enter a confidentiality agreement between the Limited Company and the Hirer, ensuring that the agreement covers all employees and Sub-contractors of that Limited Company.

Freelance Professionals who do not work on multiple assignments do not automatically fail IR35. The key factor is that there is nothing in an assignment/contract that prevents the Consultant from working on multiple contracts. Having multiple income streams from several clients and projects is a good indicator that the Freelance Professional is in business.

Phone Lists and Organisation Charts
Freelance Professionals should not appear on client’s internal contact directories and organisation charts as this can be an indicator of employment under the part and parcel test. If, for practical reasons, your name does appear on internal directories your status as temporary labour or as a Contractor should be made clear.

Reporting Line
Freelance Professionals concerned that their assignment includes a reference to a ‘Line Manager’, or the name of an individual that they are ‘reporting to’ should only be concerned if that Manager exerts control over them. As an alternative, you may like to consider using descriptions such as ‘client liaison’ and ‘liaises with’. We would recommend that you never allow yourself to be subjected to employee-like controls, such as appraisals.

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