The D&C test used in IR35 cases is based on the premise that if the Client can tell you where and how to perform your work, then an employee-like relationship exists and you are inside IR35.
Except, of course, it really isn't that simple. Control may look like a black and white distinction, but in fact it is many shades of grey.
Is it Control if the client insists a first-line support worker is on site at the same time as the users they are there to support? Or the worker has to use the client's hardware, usually because the client doesn't want someone else's equipment plugged into his network (and he doesn't see why he should spend time and effort validating such equipment for use)? Or that the worker has to adhere to the client's coding standards? Or that a tester has to have his work periodically reviewed for quality?
All the above have actually been argued in recent IR35 cases. Only one was found to represent control. That was in Dragonfly, which judgement was sufficiently off the wall that it can be ignored in this context (although what Dragonfly did settle is that reality and contract have to be aligned).
Actually I suspect this whole issue of D&C, to the client, is very simple: they want the worker to deliver what they want delivering and usually aren't all that bothered about precisely how it is delivered. The people that get worked up about where contractors sit and when they are at their desk are usually the middle managers, not the executive.
Also, the reason it gains such prominence in agency contracts is nothing to do with IR35 but everything to do with whose fault it is if the worker screws up. The agency wants the client to be "in control" because then if the worker does make a mess of things, there's no comeback on the agency. This, of course, ignores the fact that most agencies actually sell their services on the basis of having their very own stable of excellent people readily to hand.
Either way, what we need is a clear definition of Control in the context of a client/worker relationship. And that could then be used to our advantage. If that definition exists as an accepted term, then we can say to the client that Control is exercised or it is not. If it is, and you want full control over my work, then you are responsible for paying my taxes and I'll take the balance, because you want to treat me as an employee, then you can have the extra overheads that an employee would demand. If it is not, then pay me gross and I am liable for all my taxes; in fact the relationship is now clear, so why not use a simple B2B contract in stead of that complex, ambiguous pseudo-employment one you're used to having?
And if we can do all of that, then IR35 evaporates in a puff of smoke…
Freelance Consultant and Interim Manager
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