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  1. #1
    b r
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    Default How many contractors does it need to be a business rather than a PSC?

    Both myself and my wife contract through the same Limited company, and have done for +10 years. While most of her contracts have been through agencies, mine are usually direct.

    Her current contract is with the Public Sector, thru an agency - so there is concern that they'll from April pay her PAYE. But if she was working for a Professional Services firm (as a contractor) I'm pretty sure they'd be paid the day rate, and then pay her her day rate.

    So how many people do we need working for us to be classed as a business, and paid a day rate?

    Or is it a too simple view?

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    Too simplistic is an understatement. She is still selling her personal services. The company behind is irrelevant. It's how she's engaged. She's a bum on seat through an agency and that's that.
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    Ok, I understand that, but what is it that Professional Services firms do different (or are seen as different) vs ourselves doing the same?

    Having worked as a contractor for a PS firm engaged on an end-client project the only thing different (I assume, as I didn't see it) is either the contract or how the end-client Engager sees it (especially under the new rules).

    Thoughts?

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    You are missing some much it's going to take a long post to try and bring you up to speed.

    Try reading this first. It will tell you what you are for starters.

    http://www.contractoruk.com/limited_...companies.html
    'CUK forum personality of 2011' - Winner - Yes really!!!!

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    But if she was working for a Professional Services firm (as a contractor) I'm pretty sure they'd be paid the day rate, and then pay her her day rate.
    No, completely incorrect.

    Consultancies are caught too, in that if they take on contractors the contract will still be IR35 caught.

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    Very very briefly.. The big consultancies offer a packaged service. Deliver X for Y cost. The staffing, how they do it isn't really a concern of the client. You are just a bum on a seat paid per day. Lots more to it than that but it's a start.
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  7. #7

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    Quote Originally Posted by northernladuk View Post
    Very very briefly.. The big consultancies offer a packaged service. Deliver X for Y cost. The staffing, how they do it isn't really a concern of the client. You are just a bum on a seat paid per day. Lots more to it than that but it's a start.
    Are you sure - I asked (a few times) if we changed model from Bum on Seat day rate to "go away, design and deliver x, install it, and at the end get paid y" it would skip all of these and nobody wanted to say that it would be outside IR35. This has been the confusion for me all along - what is the difference between...

    1) Big software Co, comes in, develops x at a cost of Y using their staff - are they in or out of IR35?
    2) Medium SOftware co, sells of the shelf product, but as part of that, they put 20 consultants on site to deploy it, train the users, customise it - are they in or out of IR35?
    3) One man band PSC co provides service x, at a day rate of y - clearly a bum on seat - clearly inside IR35
    but
    4) On man band PSC co provides a development service, goes away, develops product Y, installs it, charges z pounds - inside or outside IR35? If inside, why is this different from (1) and (2)?

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    Quote Originally Posted by jonnyboy View Post
    Are you sure - I asked (a few times) if we changed model from Bum on Seat day rate to "go away, design and deliver x, install it, and at the end get paid y" it would skip all of these and nobody wanted to say that it would be outside IR35. This has been the confusion for me all along - what is the difference between...

    1) Big software Co, comes in, develops x at a cost of Y using their staff - are they in or out of IR35?
    2) Medium SOftware co, sells of the shelf product, but as part of that, they put 20 consultants on site to deploy it, train the users, customise it - are they in or out of IR35?
    3) One man band PSC co provides service x, at a day rate of y - clearly a bum on seat - clearly inside IR35
    but
    4) On man band PSC co provides a development service, goes away, develops product Y, installs it, charges z pounds - inside or outside IR35? If inside, why is this different from (1) and (2)?
    What are you on about, if the consultants are Perms, there is nothing to consider on the IR35 front .
    If that consultancy hires contractors they will be IR35 caught, at least that's what the regulations seem to say.

  9. #9
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    The test appears to be responsibility for delivery.

    Fixed price - responsible for what is finally delivered - outside IR35
    Time and materials - responsible for what is delivered - probably outside IR35
    Bum on seat with someone else responsible for the entire project - inside IR35
    merely at clientco for the entertainment

  10. #10

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    Yep - that is my thought process and understanding of the proposed regs...

    Deliver product X for y and we (as developers decide/quote how long and how) = outside IR35.. on the basis that other than the requirement (we need an X that can do Y), there is no SCD?

    Yes/No?

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