Being outside IR35 involves establishing a clear moat that separates you from your client’s permanent employees. Aspects such as control and substitution cover the more significant ‘macro’ activities, whereas ‘part and parcel’ can be thought of a means to evaluate the more trivial matters on the periphery of your engagement with your client. You need to demonstrate that you are simply an accessory to your client’s business and not an integral part of it.
Your objective is to ensure that to a layperson observing you at work could clearly see that you were not simply a ‘part and parcel’ of your client’s organisation – like any other employee. An employee would likely have a parking permit, appear on org charts with a job title, have business cards with the client’s branding, sit at their own desk, or use the company’s gym to work off lunch from the subsidised canteen. A consultant or contractor outside IR35 would not demonstrate such behaviours.
HMRC will be on the lookout to find evidence that you’re so deeply integrated in a client that it’s hard to distinguish you from an employee. This is also where the challenge of long contracts come into play – over the course of many months, or years, it can be easy to slip into bad habits that make you appear to be part and parcel of the client. You’ll need to be mindful of this each and every day, and keep your moat as wide and as deep as possible.
Part and parcel IR35 tips
Check out our video tips on how you can avoid becoming part and parcel of your client’s organisation.
