Contractors, are you letting the outside-IR35 team down by ‘job’ searching?

A contact of mine recently asked me to have a look at a CV for a contractor friend of theirs. Let’s call the contractor Sue. What follows is a story about one contractor’s plight to remain outside IR35 and win work at higher fees, writes Matt Craven, founder of the CV & Interview Advisors.

I reached out…

Being more than happy to assist, I reached out to Sue to schedule a review of her CV. What ensued was an interesting email exchange that highlights what I think is one of the biggest mindset shifts that contractors can make to win more contract work. But the back and forth also epitomises the plight of those fighting the good fight against HMRC and the IR35 rules.

Before I continue, if you would like a free CV review, submit your CV here.

So Sue’s CV lands in my inbox. I had an initial peek and spotted a few fundamental faux pas that needed some urgent attention. Briefly, these can be summed up as -- lack of focus, no ATS optimisation, too task-based. My next move was to contact Sue to inform her that I had spotted some areas we could improve upon, and then I suggested a number of dates that we might schedule a call to discuss.

Sue’s reply

I received a reply a couple of days later, which read as follows:

“Hi Matt, thanks for contacting me. I'm not currently active in the job market, so I’ll contact you when I’m next looking. Many thanks, Sue.”

Shock horror

Now obviously, it’s no skin off my nose. But I know this person is seeking outside IR35 work, so a number of thoughts went through my head:

1) Why is this person talking about seeking a “job”? With all the battling everyone has done to convince HMRC that contractors are bonafide businesses that should be allowed to pay taxes like other businesses, and we still have outside IR35 contractors talking about ‘jobs’.

2) What ‘proper’ business stops looking for new clients just because they have a client for a few months?

3) Why wouldn’t Sue want to have their most important marketing tools (their CV and LinkedIn profile), ready to rock and roll at a moment’s notice in case someone happens to need their exact skill, right next door to where they live, for an exorbitant daily rate!?

I’m biased

Now, the problem is, I do a lot of work with contractors to help them win more work, and I run a reasonably-sized business that most definitely falls into the category of a ‘true’ business. This makes me a little biased and also passionate about the subject.

And for the avoidance of doubt, I talk about ‘true’ businesses within the context of IR35 and what HMRC suggests an outside IR35 contractor should be i.e., a ‘true’ business rather than a disguised employee. That’s more or less the crux of the IR35 rules.

In short, contractors would be expected to act like a ‘true’ business and not a job-seeker. Not only for IR35 reasons, but also, to help them be more successful. If you’re a gun for hire, then do it properly and do the things that other businesses do to make them successful.

My feedback

My feedback went along these lines:

1. The best time to look for work, or at least develop relationships with potential clients, is not when you are seeking a new contract, but when you are in a contract. In fact, most other businesses are constantly running sales and marketing campaigns and indulging in business development activities to keep their lead pipeline and client-base healthy. It doesn’t matter whether you are inside or outside IR35, this is just the fundamental ABCs of being in business.
2. Generally speaking, businesses spend time and effort creating high-converting marketing collateral e.g., websites, landing pages, brochures, sign-written vehicles and exhibition stands. A contractor generates most of their business through their CV and LinkedIn profile, so these are fundamental assets to keep up-to-date and highly professional.
3. Now, I can only reference what was on Sue’s CV, but there was no evidence of being ‘in business on your own account’ (an important IR35 pillar) e.g., no website, no company stationery, no office address. There wasn’t even a company name mentioned on the CV, and the email address was a personal Gmail address, rather than using a proper business domain.
4. With regards to mutuality of obligation, exclusivity, accepting other work and having more than one client, I can’t be certain of Sue’s IR35 status. But from her response, it appears that she has attached herself to a sole client, given the fact that she isn’t even considering other work. This is an IR35 red flag, and of course, another sub-section of the ‘in business on your own account’ pillar is regularly tendering for contract work, as opposed to having multiple renewals at the same client.
5. With regards to demonstrating financial risk, Sue may be paying for her own mobile phone, but perhaps that’s about it, because she was certainly reticent to invest in her marketing assets and sales efforts and therefore incurring very little in terms of business expenses.
6. Not so much an IR35 point, but one I’ll make in no uncertain terms. I had a plumber look at my central heating this week. ‘Ian’ turned up in a new van which he had gone to the effort of having sign-written with his company logo, some nice plumber-orientated imagery, his telephone number and email address. In contrast, Sue had a CV that looked like a GCSE homework project. I wonder how many other contractors are being out-professionalised by their local tradespersons?!

The defence

Now in Sue’s defence, and before HMRC tap me up for more info, I’ve made a number of sweeping assumptions. Perhaps Sue has some of these IR35 points tied down, but just gave the wrong impression with her CV and email response.

Maybe Sue has a good network of contacts and some desirable skills, and hasn’t been short of work, but her £600 per day could easily be £800 per day with just a little bit more effort. Over 10 years, that’s half-a-million pounds left on the table. I’m sure Sue earns enough to be reasonably comfortable, but I’m also certain that an extra £500,000 would come in rather handy!

Letting the side down?

Sue’s financial freedom aside, we both agreed that this country needs its flexible workforce, but ironically, Sue might be ever so slightly letting the outside-IR35 team down.

Please note, this case study is based on a true story, but as with all good stories, some of the content has been embellished! Sue also kindly gave her permission for me to reference our exchange.

Here to help

On Thursday December 15th, my business, The CV & Interview Advisors (winners of the Contracting Awards Best Contractor Product or Service in 2022) will run a webinar for ContractorUK readers on how to win more contract work in 2023. You can find out more and register for free here.