As promised, and even ahead of schedule, HMRC have now published a paper setting out their legal position on Mutuality of Obligation (MOO). 
Following the announcement in the Autumn Statement of a consultation into Private Sector IR35 reforms, the industry has been flooded with news on the subject. 
 
With the Public Sector reforms introduced little over a year ago, we are seeing the effects. Impact has been noted particularly in the NHS and you can read more about this with a simple Google search – trust me, there is plenty to read. With talk of blanket assessments and concerns for contractors being pushed into the hands of offshore contractor schemes, we are all following the consultation carefully. 
 
With many IR35 and Employment Status cases reaching the courts in the past few months, all-in-all it has been quite a year for IR35. We have seen wins for contractors and HMRC alike and I think everyone is really beginning to see how much of a grey area IR35 is and how unworkable. 
Each case looks at the contract and working practices of the contractor. Some of the key indicators are:- 
 
- Supervision, Direction and Control 
- Business-like Working 
- Part and Parcel 
And, most controversially, Mutuality of Obligation (MOO). 
 
Case law very much supports the view that MOO does not always exist in a contract for services and has upheld cases where absence of MOO has been used as a defence (refer to the Jensal Software case). But HMRC have repeatedly ignored this and in developing CEST (a tool to determine employment status), MOO is omitted completely. This has been challenged over the past few months, forcing HMRC to issue this paper. 
 
In the paper, HMRC state that “CEST does not explicitly look at MOO” and that “where work is provided and remuneration is paid we will assume that there is mutuality of obligation”. Crucially they also state “where a person is engaged in a series of contracts and there is no mutuality of obligation between each engagement this is irrelevant to mutuality of obligation”. 
 
Can I read more? 
 
Of course. Read the paper here
 
Read through our IR35 Hub Blog for details on the recent cases and latest news. 
 
 
 
 
Written by: 
 
Nicola J O'Sullivan -  
Effective Accounting 
 
Founder | Xero Champion | IR35 Expert 
 
 
Tagged as: CEST, IR35
Share this post:
 
I couldn't recommend them highly enough and will continue to use them for Spiral Static and all future ventures! 
 
 
Matt Badley | Spiral Static 
 
 
 
I have found their help in modernising my accounts invaluable and would recommend them to anyone in a heartbeat. 
 
Matthew Finch | Trailer Aid Ltd 
 
 
 
The whole team at effective accounting are exceptional.  
 
 
 
Jennifer Duthie | Skribbies Ltd 
 
 
 
Nicola is one of the most adept and accessible accountants that I have ever had the pleasure of working with.  
 
 
Carter Stewart | Transworld Consulting Ltd 
 
 
Choosing Effective Accountants has been one of the best decisions we made when we started our company. 
 
 
Matthias Geeroms | OTA Insight Ltd 
 
 
 
Nicola and the team have proven to be extremely professional, efficient and always on hand to answer any questions I have (and I have a lot!).  
 
Emily Hodges | EM Hodges Ltd 
 
 
 
I find the service to be prompt, professional and friendly. 
 
 
 
Simon Weightman | Mercury TS Ltd 
 
 
 
They are quick to respond and are always ahead of the curve for us. Keep it up and thank you. 
 
 
Freda McMahon | Lobster Noodle Ltd 
 
 
Our site uses cookies. For more information, see our cookie policy. Accept cookies and close
Reject cookies Manage settings