law
Alistair Mc Arthur
Katie Harris
The tribunal found that the key features of the hypothetical contract with MMH which determined self-employment were:
• A valid substation clause. A substitute could be sent provided that they met the hospitals usual criteria.
• There was no obligation on MMH to provide work.
• There was only one-day’s notice period. Were this a relationship of employment, there would be a minimum of one-week’s notice required.
The hypothetical contract with RBH on the other hand would have included provisions for:
• A one-week notice period. • A minimum number of working hours each week.
This is an important case as it demonstrates how key differences in working practices produce different tax status results.
How should businesses prepare?
While new guidance expected from the Government will be useful to enable clients to accurately determine status, if they are to be ready in time, business should start preparing now. For the best possible chance of avoiding liability under IR35, companies should now be considering how
If you would like to know more about the proposed new regime and the impact it is likely to have on your business, contact our employment solicitors on
0118 97704045
herrington-carmichael.com Visit our website for IR35 events and more
their business is structured and how they currently engage with contractors. This should include:
• Reviewing existing contracts – contracts can be drafted to mitigate the risk of IR35 applying. Similarly, a poorly drafted contract can substantially increase your risk.
• For identified contractors falling within IR35, considering whether the extra costs are commercially necessary, or whether their current contracts should be amended or terminated.
• Estimating any likely cost increase due to the employer’s NIC and apprenticeship levy charges under IR35 and potential changes in the contractor’s rates.
• Reviewing systems and processes around your businesses engagement of contractors.
• Providing training for employees who are responsible for determining the status of contractors engaged by your business.
How can Herrington Carmichael help?
To best prepare for the upcoming changes, the employment team at Herrington Carmichael can:
• Review your existing engagements to decide whether the new rules are likely to apply to them;
• Draft contracts to take in to account the new rules; and
• Advise on (and implement strategies to) mitigate IR35 risk arising out of contractor engagements.
THE BUSINESS MAGAZINE – SEPTEMBER/OCTOBER 2019
businessmag.co.uk
39
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