Self employment is often seen as a flexible way to earn a living without the restraints of being employed. But for inventory clerks, the option before setting out on your own needs to be carefully researched including how to manage the complexities and obstacles the UK’s tax law creates around the wearing of uniform, provision of equipment and ID cards.
So what are the IR35 rules around equipment and uniform for inventory clerks?
One of the biggest challenges to the status of the self-employed is a legislative provision introduced under the Finance Act 2000 and known by the identification number of the press release in which it was announced, IR35.
It was introduced to combat tax avoidance relating to a group known as ‘disguised employees’; that is people who despite their declared status as independent contractors are operating in all but name as employees.
As IR35, and the legislation that supports it, relies heavily on interpretation, there are no clear rules about how to avoid being caught out by it.
We only have to look at the string of court cases that have led to apparently conflicting outcomes to see that no reliable precedent has, as yet, been set.
High profile cases include those of TV presenters Kaye Adams and Lorraine Kelly who were able to persuade the court they were self-employed after a hefty tax bill claim, while the BBC‘s Christa Ackroyd could not.
HMRC believes that as many as 90% of private sector contractors are actually disguised employees who are simply using self-employed status to reduce their tax liability.
You might raise an eyebrow at this figure, but given that it is part of HMRC’s remit to maximise the Treasury’s tax revenue, it is perhaps understandable that they would take such a stance.
There are various factors which a court will consider in deciding the reality of each case for taxation purposes, including the freedom of the self-employed person to set their own hours, take time off without asking permission and conduct work without instruction.
The extent of these freedoms can be difficult to judge, but when it comes to uniforms and equipment the ground is somewhat firmer.
The Pimlico Plumbers case has some useful things to tell us in this regard. Mr Smith worked under contract as a self-employed plumber for over five years.
The court judged him to be in fact a disguised employee for a number of reasons, two of which were that he drove a van carrying the company logo and wore a company uniform.
If the other compelling reasons had not been present it’s not certain that this ground alone would have been sufficient proof, however it’s enough to ring alarm bells.
It would be wrong to describe the provisions on uniforms and equipment as rules because even here there is plenty of room for debate.
Indeed, the courier company Hermes famously lost its IR35 case despite the fact that its drivers used their own vehicles, paid for their own insurance and petrol and wore no livery.
The case was decided on other grounds.
Although IR35 has proven to be highly contentious, there is some clarity regarding these practical and relatively unarguable issues.
What constitutes uniform?
In my experience at Inventory Base, inventory clerks don’t wear uniforms.
Most wear smart workwear, semi-casual or office type attire which are much more appropriate for the type of work carried out in the property.
There are, however, a few exceptions when it comes to franchise models but there are very few of those currently operating in the private rented sector.
I can’t imagine any circumstances in which a landlord or letting agent would insist on the wearing of a uniform, and very few inventory clerks say that they would want to wear one except for their own company or service.
Those that do wear branded workwear seem to limit this to a specific colour scheme, the company logo on a polo shirt, fleece or jacket and specific tops, trousers and footwear and so would constitute a ‘uniform’.
Unless you’re ‘old school’ it’s unlikely that you are still using a pen and clipboard.
You’re more likely to have invested in an inventory app like Inventory Base that provides the kind of features and application that helps you to deliver professional, quality driven reports created faster at the property and delivered to the client more efficiently.
If paid by you, specialist property reporting and management software belongs to you / your service, along with the devices on which you use it. This also include equipment such as specialist access keys, alarm testing poles, PPE etc.
If you don’t have your own equipment you should make this a priority, as it is not only more convenient it is also a key way to satisfy one of the key IR35 requirements.
Uniforms and equipment alone are not decisive factors when it comes to employment status
As an inventory clerk you would appear to fall comfortably outside the IR35 rules as most clerks work for different clients and draw up their own timetables of appointments, even if they are needed to fit to the deadlines of clients.
That said, case history strongly suggests it is better to avoid accepting supplied equipment or the wearing of uniforms outside your own service altogether.
The question of identity cards comes up a lot
Many householders today expect professional trades, visiting their homes, to produce some form of identification.
This includes meter readers, plain clothes police officers, social workers, gas engineers or anyone else who may have legitimate reason to be at the property but is a stranger whose call may be unexpected, late or rescheduled.
The problem with ID cards is that by their very nature they identify you as a representative of your client, which can be taken as a sign that you are an employee.
In the examples we’ve just mentioned these visitors are all employees, so if you emulate them you risk surrendering your self-employed status.
Most businesses with any experience in this field warn against the use of ID cards, such as the accountancy service Pink Accounts, which explicitly states: “you should not wear an ID card with your name and the client’s name on it.
You may have a pass or ID card but these will identify you as an independent contractor and state your company name”.
What is the difference for inventory clerks?
The crucial difference is that an inventory clerk’s visit is mostly prearranged and carried out in an unoccupied property, so often there isn’t the same need to prove your authority.
If the tenant is home and expecting you, then they are already likely to know you are there on behalf of the landlord so may well already have your name or company details.
So often the only identification you should need is something that relates to you and your business, not that of your client.
But what do you do if challenged for your ID?
This is the fly in the ointment.
Many clerks are subcontracting for another client – providing a white label service – so in this scenario your own company ID is not valid and might then default on the agreement you have with the company you are providing the services to.
Other identification options include your passport, driving licence or a call by the tenant or landlord to the agent to verify your details although clearly this is not always the easiest way to substantiate your credentials.
It is a conundrum…
Inventory Base Academy
As yet, there is no definitive answer to how you should manage the issue of equipment, branding, ID cards and wearing uniforms, but there is a clear need for the Government to help SME’s to overcome the threat of being classed as employed both for you as the clerk and the companies you work with.
It may all feel like you’re dancing on the head of a pin, but to deviate and not pay attention to IR35 could and can have major consequences so always make sure you thoroughly research your options and know what the current rules are when it comes to being classed as self employed.
Working successfully as an inventory clerk can be complex but is one of the key reasons that we established Inventory Base Academy.
To help support, guide and advice inventory providers and Inventrepreneurs through what can be a minefield of legislation and complex rules and expectations.