If you are currently contracting as a project manager or on a project based contract in public sector, it is possible that you will be considered inside IR35. By definition you are being hired to work on a project, this may give the impression of a disguised employment. However, if the right documents are in place you will be outside IR35.

Clearly identify the services to be performed, project deliverable and any milestones. This should include creating a document of arrangements, so the client also understands the true arrangements. Just as importantly, you should identify all services that lay outside of your responsibility. This should be clearly documented.

If you are directly managing suppliers, signing off work others complete and managing supplier performance, then those deliverables must be understood by all parties involved at the outset. Write these deliverables into the contract so they are unlikely to put you inside IR35.

Project management comes with a health warning, because getting involved in any kind of human resources processes with the client is a sure fire way to subsequently become involved with HMRC in IR35 issues. You should refuse to be involved in their clients formal HR procedures, whether they involve recruitment, performance appraisal or grievance and disciplinary processes.

There may also be employment law implications for the client if they let a contractor implement HR processes, as the contractor may not technically be authorised. Also, by implication, if you do perform those duties you are almost certainly caught by IR35. Line management and project management are not the same thing. If you adopt best practice from the offset, you should emerge from IR35 investigation unscathed.

Solution

Test yourself to see whether you fall inside of IR35 or not. You can test yourself with our partners (Contractor calculator) using the following link TEST. If you were to fail, one of our in-house lawyers can review your contract suggest where you can adjust it to remain outside IR35.