IR35 - Mutuality of Obligation (MOO)
Before I start, you need to understand that I have no legal or accountancy capacity. You will need to work with your Accountant and an IR35 consultant to determine your working status.
In the world of IR35, there is nothing that is guaranteed to place you outside of IR35, there are many things that need to be considered. However, there are three big items that seem to have more weight than others. These are:
· Mutuality of Obligation
In this article I want to give a very quick summary of ‘Mutuality of Obligation’ (MOO)
MOO is where a company is obliged to offer you work and where a worker is obliged to accept the work. You can see that this is something that exists in and Employer / Permanent member of staff relationship.
MOO is something that you should avoid. You do not want to have the obligation to accept further project work from your end client. Likewise, the end client should not be obliged to offer you further projects.
You should ensure that the concept of lack of MOO is specified in your contracts. Ensure that they are not open ended.
Some related things that you need to avoid are:
· Contracts that are extended.
· Rolling Contracts.
· You are not prevented from working with other clients.
· If there is a notice period (both ways), it should be close to zero days.
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Related articles that show that not having Mutuality of Obligation is very important in attempting to win at an IR35 Tribunal.
IR35 tribunals are nothing new, but November saw HMRC defeated at First Tier Tribunal in two separate IR35 cases, which was perhaps a first. Both tribunals hinged on Control and the controversial Mutuality of Obligation.