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Food For Thought

Owner managed contractors sometimes worry about compromising their likely ‘IR35 compliant work status if they purchase food from the client’s restaurant or canteen.

Instead of avoiding staff eateries altogether or ignoring the possible risks of using them you need to consider the whole picture for each engagement you take up. Not rely on a standardised, tickbox approach that applies to all of them.

To avoid compromising the overall picture for an engagement, that may turn out to be borderline instead of safely IR35 compliant, I suggest that you base your decision to use staff eateries on what seems reasonable and justifiable.

It's unlikely that purchasing food at the client site will point to deemed employment if:

1. You stay away from home and you need to work on a remote business park a long way from easy-to-reach shops, cafes and restaurants.

If you don't eat on-site you'll go hungry or you'll need to drive to a nearby town to pick up a sandwich. But if you need to travel in from home or you are staying away from home and need to work all day on a client site that's close to food shops and cafes, take a packed lunch or purchase your food off site instead.

2. You need to work on site and a staff member, who supports your deliverables, invites you to a working lunch in the staff eatery.

It's unwise to refuse and it's fine to accept if they are paying. But it's unreasonable to insist that they accompany you to a café or restaurant that gobbles up their lunch hour and costs them more for food than they wold otherwise pay, particularly if they can't reclaim the expense.You could, of course, invite them to a working lunch and pick up the bill.

3. You need to work on site and wish to eat regularly in the canteen and have the option to pay full price for the food on offer.

That is unlikely to be the case, because client organisations tend to offer subsidised food to their staff, and you're likely to be charged the same price for your meals too.

4. You wish to buy canned drinks and snacks from the client's dispensing machines. These are usually sold at commercial rates anyway.

There's no point in going off site to a newsagent just to purchase a Mars Bar.

Ask yourself which of the following two statements you most identify with whenever you purchase food from a client site for your engagements. You'll be on safer ground adopting the first approach than the second.

"I only purchase food from the client site when it's reasonable and justifiable, under the circumstances. Besides, other business suppliers would probably do the same."

"I always use the staff eatery because it's convenient and cheaper and everyone else eats there too, including contractors. Besides, the 'Thursday Special' lamb roast and plum crumble for only £3 is too good to miss."

Just a final point to chew over. Avoid becoming complacent if your engagements are prolonged. It's easy to slip into bad habits, even if you begin with good intentions. If you are careless, you will find it harder to justify your actions to HMRC inspectors, should they investigate your engagements.

Bel Grant
Writer on Flexible Working and Recruitment
19th May 2009