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Service status

30 May 2007
Issue: 4110 / Categories: Forum & Feedback , IR35
HMRC's IR35 Unit has stated that it is undecided on the determination of status of our single director/employee 100% controlled company client ('the consultant') that provides management consultancy services to banking institutions on a single contract by contract basis (typically of four to six months duration).

HMRC is seeking clarification to help them form an opinion raising the following points.

  1. Our client company maintains that there is no direction as to how the services are performed and no exercise of control over skills and knowledge used yet the contract requires that all reasonable directions of the bank shall be obeyed. Whilst acknowledging that direction and control are not exercised HMRC is citing that a right of direction and control exists. Surely all relationships have boundaries as the 'reasonable directions' here appear to be one of the general clauses under the contract subheading 'consultant's obligations' and such directions and control do not appear to be specific to the services to be performed.
  2. Our client company can accept engagements from other companies which do not impinge on its ability to provide the services at such a time and in such a...

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