IR35 is a sticky piece of legislation originally introduced under the Labour Government in 1999. Fully titled “IR35: Countering Avoidance in the Provision of Personal Services”, the purpose of the measure is to eradicate the practise of an individual providing services to a company as a Contractor, when in fact they are existing as an employee. This has led to many new and existing contractors wondering if their work falls in or outside IR35. In this series we will examine the main indicators of IR35 status.
Direction and Control usually refer to broadly the same thing as far as IR35 is concerned. Similar to The What, Where, When and How Tests, Direction and Control determine how you interact with your client, how they determine and influence your work, and hence your relationship with them.
At it’s most basic level, Control means can your client order you around, in the same way they would an employee? If you are seen to be performing extraneous tasks, outside the remit of your original contract, then your client would be deemed to have a large amount of Control, and you may fall within IR35.
Direction refers to how much your client can influence the way in which you perform the task you have been hired to do. If your client is giving you day-to-day direction on how to best carry out a task, then they are giving you excessive Direction and, again, you may fall inside IR35.
See Part 1: IR35: What is “Mutuality of Obligation”?
See Part 2: IR35: What is “Substitution”?
See Part 3: The What, Where, When and How Tests
See Part 4: IR35: Other Determining Factors