IR35 and AWR – separated at birth?

Contractors concerned with their IR35 status or their employment situation once AWR comes into force in October have been handed a small sliver of clarity, however many questions remain unanswered. Adrian Marlowe from employment experts Lawspeed has spoken out on the apparent similarities between the IR35 employment tests and how a contractor can determine their AWR position.

Marlowe told Contractor Calculator that “an individual supplied to work under the direction and supervision of a hirer is an agency worker… regardless of any hypothetical employment tests, such as those used to determine IR35 status.”

The key difference is that an Agency Worker will be “supervised and directed”, whereas a contractor inside IR35 will be “controlled”. Although these may sound similar, the key to understanding the difference is to examine the role of an Agency and that of an Employer.

An Agency (or Temporary Work Agency / TWA) will find a contractor a position within a hirer’s company, and will supervise and direct the contractor in the sense that the contractor will be required to submit timesheets, and the TWA may re-assign the contractor if needs be.

By comparison, an Employer in will control a contractor in terms of their day-to-day work, for example giving them specific tasks to complete and telling them how to complete them.

Marlowe went on to conclude that this means a contractor can be affected by AWR and be outside IR35, or vice versa. Your IR35 status in no way impacts how the AWR will affect you.

When it comes to IR35 enforcement, however, this could create yet more uncertainty. If a contractor were to exercise their right under AWR to equal usage of company amenities (childcare, staff dining facilities etc.), could it mean they were more likely to fall inside IR35 under the “part and parcel” test?

The relationship between the two pieces of legislation is still unclear, and although they may be separate entities from a legal point of view the way in which they intersect and influence one another has yet to be explored. So, for the Agency Workers Regulations it appears to be business as usual – uncertainty.

Photo by Marieke IJsendoorn-Kuijpers - CC