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  1. #1

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    Default From consultancy to contracting

    Hi Guys,

    Need bit of a advice here and can use some wise words. (Apologies in advance for a lengthy message)

    I have been working a senior consultant for a leading UK based IT consultancy where I have been picking up a lot of internal team leadership, business development activities etc. My key project was at a client where i am leading a small team within a transformation program.

    Now, I am looking to move into contracting world, did my resignation as well and serving my notice period. My permanent employer did offer me contract for same project and deliver for few months before i skip off. I declined politely primarily because of IR35 and secondary due to the financial challenges aka, i am sure they will try to replace me as soon as they can because of hit on their margins. I would rather prefer to contract with end client directly than consultancies.

    However, there is a possibility coming up that my end client has shown interest in keeping me as a contractor. There is a discussion coming ahead between my perm employer and client on same subject but before I jump in that one, I need to understand few things

    -I can switch from my permanent employee to end client considering following
    -- Project role may (or may not) be same. high probability that it will be same to begin with before I can move to a different project on same client.
    -- I wont have any affiliation with my permanent employee. not taking any of activities like team leadership / business development / trainings etc with the employer.
    -- Of course no paid holidays, no training and development for myself with either ex-employeer or end client
    -- Due to nature of project and geographic locations (its a worldwide project), working hours / location has been pretty flexible for everyone and will stay the same flexible for me if I keep working with them.

    So questions I need help on is
    - Should I take the role with end client immediately or not ? Will it bring me in within IR35 ?
    - Should I take another contract with a different client lets say for 3-6 months and than come back ?
    - If I decide to work for end client, will having IR35 insurance help ?
    - Anything else i need to be mindful off ?

    Any word of advice would be appreciated.

    Thanks
    J

  2. #2

    I live on CUK

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    Depends.

    No one can give you a definitive answer because we don't know if the roles are the same.
    "Youíre just a bad memory who doesnít know when to go away" JR

  3. #3

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    Quote Originally Posted by ravian222 View Post
    -I can switch from my permanent employee to end client considering following
    The default answer would be no as they will have a poaching clause as well as arguing over handcuffs but it can be negotiated through in some cases but it's not common.
    -- Project role may (or may not) be same. high probability that it will be same to begin with before I can move to a different project on same client.
    It's a grey area. Anti-poaching will focus on you regardless of area of work. Handcuff may still come in to play if your current employer had even a sniff of getting work in that area in the future and won't know because you are doing it.
    -- I wont have any affiliation with my permanent employee. not taking any of activities like team leadership / business development / trainings etc with the employer.
    Doesn't matter, you are probably still covered by the handcuff
    -- Of course no paid holidays, no training and development for myself with either ex-employeer or end client
    Correct
    -- Due to nature of project and geographic locations (its a worldwide project), working hours / location has been pretty flexible for everyone and will stay the same flexible for me if I keep working with them.
    Irrelevant for the case of switching employees and handcuffs. Relavant (but not really an issue) for an IR35 discussion.

    So questions I need help on is
    - Should I take the role with end client immediately or not ? Will it bring me in within IR35 ?
    I'd say it is. You were an employee of the consultancy at the client. You are now still with the client just under another remuneration model. The whole thing is about you and pay. The LTD and contractor model would be irrelevant which IMO would make you a Monday to Friday Contractor. You've got 24 month rule issues I CBA to go into as well.
    - Should I take another contract with a different client lets say for 3-6 months and than come back ?
    Now that's an option.. but.. if you are going to go contracting why not do it properly and become a business selling your skills. Why put so much faith in an ex-employers client. There are many many places out there that need contractors. Hanging on to a 'safe haven' isn't really what we do. I'm sure if you get out there and do it properly you'll not need to come back.
    - If I decide to work for end client, will having IR35 insurance help ?
    Now there is a good question. I'd say no because IMO you are clearly inside so you shouldn't be able to take it but I'm sure the specialists could spin it to show you are not. Too grey to say. But... IMO... if you are having to resort to IR35 as your only back up then leave it and go do it properly somewhere else.
    - Anything else i need to be mindful off ?
    All this isn't enough? If you are good enough I'd say dump the lot of them and go out and do it properly. Don't bugger about in your little safe hole. It's gonna hit you very hard if you think that's contracting and then hit the real world.
    Any word of advice would be appreciated.
    word
    Thanks
    J
    YW
    NL

    P.S. Gotta work on that English or at least understand what you are writing better. The mix up of the word employer and employee made that very difficult to understand at times. Small difference but massive change in situation.....
    Last edited by northernladuk; 7th April 2016 at 15:14.
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    Handcuff thing might be hard to beat as NLUK says, but if the end client wants you, they can probably get you. They hold the cards, your former employer isn't going to throw away a client relationship simply to handcuff one guy.

    Really hard to say, but I think you might have a decent chance of beating IR35 on this one, if it is short. The fact that you were not an employee of the end client before means they didn't see you as an employee who is continuing as an employee. So if you are there for 3-6 months and then move on to something else, it's pretty easy to argue you weren't ever their employee, you were an outside expert who just provided your services through a different company the last few months you were there. If you stick around a long time, it gets harder, because the whole part and parcel thing can kick in. The main thing, as always, will be working practices. The flexibility you describe will help you claim there is not SDC.

    If I were in your place, and decided to take it on, I'd be looking to move on before long, and I'd be planning to make some pension contributions out of the proceeds of this first contract, which would lessen any liability under IR35 if you got caught on it later.

    Alternatively, you could just take the contract on and operate inside IR35. It's not the end of the world for 3-6 months, and you'd get your company set up, learn a lot about contracting, etc.

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    Is this you as well?

    http://forums.contractoruk.com/accou...ms-client.html

    What did Accenture say...?

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    If it's a large consultancy and they have significant business from the current client, I would assume they would let you go contracting at the client directly and not start raising handcuff clauses. Consultancies are used to this (at least in IT) and may ask for a token payoff from the client.

    IR35 - whole another issue

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    Quote Originally Posted by jbond007 View Post
    If it's a large consultancy and they have significant business from the current client, I would assume they would let you go contracting at the client directly and not start raising handcuff clauses. Consultancies are used to this (at least in IT) and may ask for a token payoff from the client.

    IR35 - whole another issue
    You've got to take in to account if they are doing for one there could be tide of wannabe's who then get knocked back, get the grump on an ultimately end up leaving the consultancy. I've seen this at Royal Mail and CSC many moons ago.
    Yes the client has some leverage with the consultancy but how many can try this before it becomes a major issue. Just something else to consider.
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    Thanks all.. interesting and helpful comments indeed

    And no thats not me from Accenture... But glad to see that there are similar examples around.

    Good details from NLUK... so few comments

    - Poaching is a probable challenge. I am sitting at senior technical management (or middle tier management as a whole). So my current company is not very happy with the prospect of client grabbing me... Though client is asking me that they see it as everyone wins situation to push with company (considering program tight spot) and company will probably fold if I am good to join them... I have my concerns with IR35 and hence my question. I dont want an argument between client and company when I can end up in a bad situation by the if I join. I do have a good repute with both of them so far and would like to keep it this way

    - Project role would highly likely be same to begin with and than maybe a different project after a few months as they're rolling into a different program
    - However, as I said I will get rid of lot of my other projects / responsibilities with my company
    - 2 years rule does apply to me even now :S :S .... have been working with number of clients on split time basis but this client is main one for last 3 years now...

    To be fair, there are some other prospects as well around which I am discussing. Interested in this one due to a possible high take out and ease of settling in quickly. but if it becomes too grey, than to be fair, I might end up deciding to leave it for now atleast and do something else.

    Thanks
    J

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    Quote Originally Posted by ravian222 View Post
    Thanks all.. interesting and helpful comments indeed

    And no thats not me from Accenture... But glad to see that there are similar examples around.

    Good details from NLUK... so few comments

    - Poaching is a probable challenge. I am sitting at senior technical management (or middle tier management as a whole). So my current company is not very happy with the prospect of client grabbing me... Though client is asking me that they see it as everyone wins situation to push with company (considering program tight spot) and company will probably fold if I am good to join them... I have my concerns with IR35 and hence my question. I dont want an argument between client and company when I can end up in a bad situation by the if I join. I do have a good repute with both of them so far and would like to keep it this way

    - Project role would highly likely be same to begin with and than maybe a different project after a few months as they're rolling into a different program
    - However, as I said I will get rid of lot of my other projects / responsibilities with my company
    - 2 years rule does apply to me even now :S :S .... have been working with number of clients on split time basis but this client is main one for last 3 years now...

    To be fair, there are some other prospects as well around which I am discussing. Interested in this one due to a possible high take out and ease of settling in quickly. but if it becomes too grey, than to be fair, I might end up deciding to leave it for now atleast and do something else.

    Thanks
    J
    Hard to really judge from this side but sounds like a bit of a mess at best. Good to hear you are also looking for prospects outside as well so that answers my concerns you are not really wanting to be a contractor and are just getting greedy and grabbing an opportunity that's sitting in front of you. The fact you are looking elsewhere means you've got the right mindset. There are many of us with very successful careers in contracting so the work is out there. That role is not the only one and I'll bet a much better option will pop up in no time. IMO you'll look back and be glad you dodged the bullet you are facing at the moment.

    Keep at it... It all comes to those with the right attitude and desire.
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  10. #10
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    "So questions I need help on is
    - Should I take the role with end client immediately or not ? Will it bring me in within IR35 ?"

    Very difficult. The reasons already explained in other posts.


    "- Should I take another contract with a different client lets say for 3-6 months and than come back ?"

    Best option, usually after 6 months or more.


    - If I decide to work for end client, will having IR35 insurance help ?
    - Anything else i need to be mindful off ?

    Any word of advice would be appreciated.

    Thanks "

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