IR35 contract advice please

[FunkyPigeon]

Hi,

I have been a long-term observer on the forum, but this is the first time I have posted, and I was looking to get some advice on a new contract I have recently started and the IR35 status.

I started a new contact two weeks ago with a local authority and it has been deemed outside of IR35. Within the contract under the statement of work there were clear deliverables for weeks 1 and 2 to complete a scoping activity to agree milestones with stakeholder (this was to be completed by Friday 29th January). These milestones once agreed would be the activities and deliverables that would form the next part of the SoW (February 1st to July). The SoW states from 1st February the deliverables for the work are the “Milestones agreed in week 1 and 2 and confirmed via change acceptance note.”

Unfortunately, the deliverables have not been agreed with the end client and the consultancy. I have discussed the deliverables internally but have not spoken to the client lead who I report to within the organisation since the morning of my first day and they have told the business internally to use me as they see fit. This has already led to confusion and differing of opinion with the work that I have been expected to start work on and deliver.

I contacted the consultancy last week to raise my concerns and they have only just come back to me today and have said “In the contract, it is more for our records as we weren’t given deliverables from the client lead. Once you have a clearer idea of milestones, please can you let me know ?”. I have always had a clear SoW in 5 years of contacting, so this is concerning me.

The people working in the organisation are really nice but the set up and ways of working of the organisation are very tulip and have led to other worries about the determination of the IR35 status. One being they want me to work across two local authorities when I only have an agreement with the one local authority.

I have completed the IR35 shield and the determination status is that the contract is inside IR35 and fails under both ‘Mutuality of Obligations’ and ‘Control’. I have contacted various IR35 specialists for more advice and I am awaiting them coming back to me but wondered in the meantime if anyone could offer any advice here before I go back to the consultancy.

Thank you in advance,

FP

[Lance]

are the public sector client responsible for determining your IR35 status?
If they are, then ask for a copy.
Then rest easy as it's not your problem.

Since April 2017 (or was it 2018) they are responsible for the determination and any financial risks with underpayment of tax.
If the consultancy are your actual client, then it's their problem after April 2021, but yours now. Given that means your maximum exposure is 3 months, the rest easy (but keep some spare cash in case you are found wanting).

[FunkyPigeon]

Thank you Lance.

I have spoken to an advisor this evening and you are correct at the moment it is my responsibility to make the determination and from April it becomes the consultancy's responsibility.

I have reviewed the contract again and it states:

The Consultancy acknowledges that Off-Payroll status is subject to change during the term of the assignment. The Consultancy agrees and accepts that the Supplier is entitled to vary the Agreement to comply with Off-Payroll and may be required to terminate with immediate effect pursuant to clause 9.

The advisor said that the consultancy should make their determination status now to avoid confusion for April. If I thought the role was inside IR35 I would not have taken the role on, it wasn't until I started the work that the alarms bells started to ring.

I have spoken with an old colleague who was by co-incidence contracting doing the same role as me now up until 2019 and they were inside IR35 for this role. I am unsure why it has been sold to me as outside IR35.

At least I have learnt more about the legislation and it makes me stronger for the future.

[northernladuk]

are the public sector client responsible for determining your IR35 status?
If they are, then ask for a copy.
Then rest easy as it's not your problem.

Since April 2017 (or was it 2018) they are responsible for the determination and any financial risks with underpayment of tax.
If the consultancy are your actual client, then it's their problem after April 2021, but yours now. Given that means your maximum exposure is 3 months, the rest easy (but keep some spare cash in case you are found wanting).

It's been a long time since I looked at this and don't remember the outcome but isn't their some nuance to this when the end client of the consultancy is public sector. Didn't that mean in some cases the contractors to the consultancy were already under the public sector rules? There was a lot of confusion back in the day.

OP do you know what framework they are engaging the client under? Full service Gcloud thing or a body shopping one?

I did think the public sector on the whole had gotten on top of this one. My public sector client seems pretty slick at it now with a mix of outside managed service contractors and inside temps on board.

[Lance]

It's been a long time since I looked at this and don't remember the outcome but isn't their some nuance to this when the end client of the consultancy is public sector. Didn't that mean in some cases the contractors to the consultancy were already under the public sector rules? There was a lot of confusion back in the day.

It can be confusing hence why it's important to ensure that it is the end client who makes the determination. Getting a copy isn't about having a copy it's about confirming that the PS client have made the determination so you're in the clear.

It matters not come April as it's the same for all (small businesses use too few contractors for us to be really concerned about here IMO).

[Fred Bloggs]

Sounds to me a lot like "smile sweetly and keep on invoicing".

[jamesbrown]

Seems likely that the supply chain is stretching the boundaries of credibility regarding: a) what constitutes a fully contracted out service (and, therefore, resting with you for determination, rather than the end client); and b) the working practices being outside IR35 (sounds like window dressing around a standard T&M contract). That said, as others have indicated, April is only around the corner now.

[FunkyPigeon]

Thank you for all your responses.

The supplier came back to me today to say they work as an intermediary so the end client, being the local authority in this scenario are in charge of making the IR35 determination. The supplier attached the CEST determination that they received for my piece of work which was completed by the local authority.

Still strange not to have any agreed deliverables for the work but I guess I keep invoicing and get my head down.

[Lance]

Thank you for all your responses.

The supplier came back to me today to say they work as an intermediary so the end client, being the local authority in this scenario are in charge of making the IR35 determination. The supplier attached the CEST determination that they received for my piece of work which was completed by the local authority.

Still strange not to have any agreed deliverables for the work but I guess I keep invoicing and get my head down.

Yep.

At some point someone in procurement will realise they've made a balls up. Until then keep invoicing.

[malvolio]

Regardless, it still depends if you are providing a discrete service or working as a manpower replacement or addition. The consultancy is off the hook only if they are providing a complete service solution such as a new application or website. If they are augmenting the client's workforce then the PS rules will apply.