RE: Capita, IR35 and the Contingent Labour ONE framework
Geoffrey Ward made this Freedom of Information request to Department for Business, Energy and Industrial Strategy
Dear Department for Business, Energy and Industrial Strategy,
I refer to my previous request regarding Capita, IR35 and the Contingent Labour ONE framework, request reference: FOI2017/17108
Having read your replies to my initial request I have some additional questions regarding IR35, Capita and CL1 and how I, as a contractor, can ensure that I am providing services within a compliant framework.
1. You state that:
1. BEIS can and have used Capita for the provision of services which are ‘Out of Scope’ and compliant.
Could you please explain how services that are “out of scope” of IR35 can be compliant with CL1, given that the CL1 framework is designed only for the recruitment of staff falling within the scope of IR35?
2. You replied:
2. This relates to the agreement between BEIS and the worker. Hours of work of the Temporary Worker are agreed between BEIS and the Temporary Worker. The terms of the agreement will dictate if someone leans towards the IR35 decision. Individual line managers are responsible for ensuring that the HMRC IR35 assessment is completed correctly and the work is taken forward in line with HMRC regulations. Although the responsibility of the decision is made by the Public Authority, the Fee Payer (party paying the worker – typically the agency) has a responsibility to conduct their own level of due diligence, to ensure the assessment is correct and in line with the working practices/assessment. At the point of extension the Public Authority has an obligation to reassess the worker.
Having read your answer, I am not certain that it answers my question. I asked:
“The HMRC IR35 test asks whether contracts a) allow for substitution and b) confirm that no supervision is taking place. What steps do Capita and/or BEIS take to ensure that working practice matches the terms of such a contract?”
To reiterate, could you confirm whether you allow for substitution and whether supervision is or is not taking place on contracts through the CL1 framework?
3. You write that:
3. The worker has the right to evoke a substitution though CL1, but it must be agreed with the Hiring Manager. This would be compliant with the CL1 Framework.
If it must be agreed with the hiring manager does that mean that contractors do not have the right to substitution? How is this enforced, for example, have there been any instances of a hiring manager not agreeing to a substitution?
4. In point 6, you write that: “As at 6 April 165 contractors were assessed against IR35 legislation. Of these 12 were in scope of the IR35 legislation.”
If 153 contractors are, therefore, outside of scope of IR35, was it compliant to hire them through CL1 as the CL1 framework is designed for staff within IR35.
I look forward to receiving your clarifications of the above points.
Dear Mr Ward
Thank you for your email of 30 October 2017.
The Department will be treating your additional queries as a "Business as Usual" response.
I hope to let you have our answers to your queries shortly.
Information Rights Unit
Department for Business, Energy & Industrial Strategy
Orchard 2, 2nd Floor
1 Victoria Street
Please see my answers to the points you raise below:
1. CL1 is a compliant Framework for the provisions of services for both
‘In’ and ‘Out of Scope’ workers. I understand a large proportion of the
CL1 contractor base operate out of scope.
2. The individual Hiring Manager completes the HMRC IR35 assessment and is
responsible for making sure working practices are taken forward in line
with HMRC regulations. There may be some situations when substitution is
taking place on contracts through the CL1 Framework but there are no
central records to confirm this.
The Hiring Manager can reassess the worker at any time during the
contract. At the point of extension Hiring Managers are asked to reconfirm
the IR35 status before proceeding with any revision/extension.
3. The hiring manager and contractor must agree to any substitution. We do
not have any central records of a hiring manager not agreeing to a
substitution. These arrangements are agreed at a local level.
4. I am not sure I completely understand the question here – CL1 is
compliant route but not mandated as a framework of choice. Therefore the
assessments made are irrelevant to CL1, as they were made outside of CL1
(unless there was transition piece).