The service contract affects IR35

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1.4 The tax plan of a freelance consultant must consider IR35

For a service contract to exist three conditions have to be fulfilled.

1) You are paid a wage for the provision of services to some party.

If a substitute for your services is accepted in the contract then you potentially will be earning income not from your own work and this will help arguing that a services contract does not apply.
If you get paid an agreed hourly or weekly rate for your services and cannot provide a substitute then this is akin to receiving a wage and to imply that a service contract exists.
If you get paid a fixed sum for your services then is a badge of self-employment and implies that a service contract does not exist.

2) You agree that in the performance of services you will be subject to the other's control in a sufficient degree to make the other party your superior.

A customer authorising your weekly timesheets means that you are being closely controlled and this implies that a contract of services could exist.
Conversely agreeing a fixed price for a contract without the requirement to get timesheet authorised implies that your services are not controlled in the same manner and that a service contract does not exist.

3) The other provisions of the contract are consistent with its being a service contract.

Working at a client's site using their equipment implies that a service contract does exist. If however, you work from your own office using your own equipment then this implies that a service contract does not exist.

There are many issues to consider and a general overview of all factors must be taken before a decision can be made. Those listed above are major factors in such decision-making, but not necessarily conclusive.


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