Qdos Contractor have been defending contractors against IR35 since the legislation was introduced. The legislation is based on historic case law, so each significant case can determine how it is assessed. For the best part of the legislation's life however, there have been three key tests, namely; the right to provide a substitute worker in order to fulfil the contract, control over how the contract is delivered, and the lack of existence of a mutuality of obligations between the parties (however this third test, often shortened to MOO, has been misinterpreted on numerous occasions).
With these three tests (plus a plethora of other supporting tests such as financial risk) Qdos, HMRC, and the courts determine the status of a contractor operating as a limited company. The responsibility for determining IR35 lays at the feet of the contractor themselves, and failure to assess appropriately and pay the relevant taxes, can lead to a lengthy investigation and eventual payment of liabilities, interest, and potential penalties.
Understanding whether an individual falls under IR35 is complex and can have significant consequences should HMRC determine that tax is owed. To protect themselves from being forced to pay back thousands of pounds, workers should consult specialist experts and consider taking out insurance.