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IR35 Employment Status - What do HMRC define as an Office Holder?

Posted by: Charmaine Kenny 9 Mar 17  | Government

Here at Baltimore Consulting, a number of our candidates and clients have recently come to us, somewhat puzzled over question 4 on the digital HMRC tool - “Is the worker or their business an office holder for the end client?

With such a high degree of uncertainty and essentially lots of room for interpretation, I wanted to share with my network the response we've received directly from HMRC:

The tool describes, “An office is a permanent, substantive position that exists independently from the person who fills it”. This has seen a number of clients immediately click “yes” (as all be it an interim position they are filling), ultimately they are covering a substantive position. If you input “yes” into the tool, this immediately throws out this response "This engagement should be classed as employed for tax purposes" before even answering any questions surrounding the post.

My concern with this was very much around the fact that a large number of Local Authorities UK wide that employ senior contract resource or those that possess really niche skill sets such as Adult Social Care, Children Services and SEN have traditionally struggled finding the right person substantively, and in some cases have been out to advert 3 times with no success. So if they don't have the resource or skills internally to help, what are their options?

They need to get an experienced, professional interim onsite for a certain period of time to assist them with a number of tasks, be it project related, strategic work, commissioning focused and/or operational responsibilities. It then begs the question, why should a Limited Company Contractor be penalised and expected to be PAYE if the role in question is outside on other areas such as Supervision, Direction & Control, Mutuality of Obligation and substitution.

Having been informed by a number of client’s that both existing contractors and new roles would now be captured within IR35, I wanted to get clarification from HMRC themselves to ensure we reduce the risk of interrupting contracts and misinforming all concerned.

HMRC have this morning confirmed the following: 

Question asked by the HMRC tool:

“Is the worker or their business an office holder for the end client?” [An office is a permanent, substantive position that exists independently from the person who fills it. Holding office includes board membership or statutory board membership, or being appointed as a treasurer, trustee, company director, company secretary or other similar statutory roles.]

HMRC Definition of what an Office Holder is:

“A person who has been appointed to a position by a company or an organisation but doesn’t have a contract or receive regular payments”.

I then asked, if they have a contract and receive regular payments, should we be answering no on the tool as this would suggest they are not an office holder? HMRC confirmed this would mean the contractor in question wouldn’t be classed as an office holder.

I know this has been a concern for a number of public sector clients and PSC’s, so I hope this is useful and allows more of us to work with accuracy as opposed to second guessing and taking a blanket approach, as this will unfortunately only result in losing the best talent and costing authorities more time and money.

As trusted advisors Baltimore Consulting are here to help, so should you have any questions or need further assistance please do not hesitate to get in contact with our specialist team on 0117 929 3812 or email:


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