• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.

Going direct with client

Collapse
This topic is closed.
X
X
Collapse
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Going direct with client

    Hi,

    I am working on a outside IR35 contract through below route:
    Me -> Umbrella -> Agency -> IT support provider -> end client

    I have signed contract with umbrella only. The agency has originally head hunted me.
    the end client wants to sign a direct contract with my own Limited company removing everyone else from the chain. The IT support provider has agreed with end client that they will let me go directly with end client.

    My question is - can I go direct with end client or the agency has a way to block my this move?
    I believe that my Contract is with umbrella only and I should be able to work directly with end client.
    Am I missing something here?

    Thanks

    #2
    Yes you have. Rather a large point.

    By using an Umbrella you are now inside IR35.

    You can’t now move outside on this contract without HMRC noticing.

    I would look at your contract again, there maybe one or two other clauses that you may have missed with regard to exclusivity.
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

    Comment


      #3
      what makes you think it's outside IR35?
      Cojak is correct in that it can't be outside IR35 due to you being employed by an umbrella. But for some reason you think it is. How is that?

      Have you seen an SDS that says outside?
      Who is the end client on you contract, the support provider or the end client?

      With so little information that answer is that you shouldn't pursue this. On the face of it you will be quitting employment to go contracting for the simple reason to gain a tax advantage. That is right in the target area of what IR35 is intended to stop. So if you are noticed I'd say it's a slam dunk win for HMRC.
      See You Next Tuesday

      Comment


        #4
        It's the agency that will have the handcuff and will block any direct engagement as it is them that will lose commission, not the umbrella. They are just a payment vehicle and won't care.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          The contract could be outside IR35 but he may have choose to use an umbrella company. My first contract many moons ago was via an umbrella company, mainly because of convenience until I got my head around running a limited company.

          Comment


            #6
            Originally posted by gbonner View Post
            The contract could be outside IR35 but he may have choose to use an umbrella company. My first contract many moons ago was via an umbrella company, mainly because of convenience until I got my head around running a limited company.
            if done through an umbrella there is no intermediary. So strictly speaking it is outside the 'scope' of IR35. That is different to a contract that is in the scope but still outside the regulation.
            So we are mostly lazy in talking about umbrella being inside when it's not really.
            See You Next Tuesday

            Comment


              #7
              Originally posted by Lance View Post
              what makes you think it's outside IR35?
              Cojak is correct in that it can't be outside IR35 due to you being employed by an umbrella. But for some reason you think it is. How is that?

              Have you seen an SDS that says outside?
              Who is the end client on you contract, the support provider or the end client?

              With so little information that answer is that you shouldn't pursue this. On the face of it you will be quitting employment to go contracting for the simple reason to gain a tax advantage. That is right in the target area of what IR35 is intended to stop. So if you are noticed I'd say it's a slam dunk win for HMRC.
              My contract was originally outside IR35 only but I chose to go with an umbrella company. Even now, I am thinking to work through an umbrella company only but the Agency and IT Support Provider will not be in chain.
              In my current contract with Umbrella, the client is mentioned as IT Support Provider. The true end client name is no where in my contract. My assignment details contain name of the Agency. There is no tax saving angle in my pursuit of this route. The End Client has asked for this route and they have agreed with IT Support Provider that IT Support Provider will let me go free and work directly with End Client.

              I am wondering how Agency would be able to stop this arrangement? I can simply resign from my current umbrella and go to a new umbrella who signs a contract with end client. Can the agency create any issue here? I am on a monthly payment terms with Agency so if I do this and if agency is unhappy, can they stop my last month's payment? I am sure Agencies would have a way to protect their business interest but I am unable to figure it out.

              Comment


                #8
                In that case, it will be a different contract.

                Resign from your current umbrella and go with a legitimate umbrella that is acceptable to you and the end client.

                There’s normally a clause in your agency contract that tries to stop this but since you only have a contract with the umbrella, I can’t see how it applies.

                (But saying that, I’ll bet that the end client won’t accept you using an umbrella, so the posts above this one still applies…)
                "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
                - Voltaire/Benjamin Franklin/Anne Frank...

                Comment


                  #9
                  Originally posted by cojak View Post
                  In that case, it will be a different contract.

                  Resign from your current umbrella and go with a legitimate umbrella that is acceptable to you and the end client.

                  There’s normally a clause in your agency contract that tries to stop this but since you only have a contract with the umbrella, I can’t see how it applies.

                  (But saying that, I’ll bet that the end client won’t accept you using an umbrella, so the posts above this one still applies…)
                  Why do you think that end client will not accept me using umbrella?
                  Also, would I have any risk if I open a LTD company and sign outside IR35 contract with end client?

                  Comment


                    #10
                    Originally posted by northernladuk View Post
                    It's the agency that will have the handcuff and will block any direct engagement as it is them that will lose commission, not the umbrella. They are just a payment vehicle and won't care.
                    Neither me nor end client have signed any contract with Agency so how any handcuff clause will apply? How would agency protect their business interest in this case?

                    Comment

                    Working...
                    X