Outside to FTC to outside

[davecontractor101]

Hi there

I am after your thoughts please.

I had an 18 month Outside role with a client (me>my ltd>agency>end client).

End client decided they hated contractors so looked to move us all to FTCs (but firstly did an IR35 determination and issued outside determinations and then said no we will not allow contractors).
I took a FTC - different site/location and new responsibilities.

My employer has now decided they made a mistake and now no longer want FTCs so want to offer day rate roles again.

So my question is:
if I do decide to move from FTC back to day rate - but with different roles and responsibilities, what is the possibility of this being determined as outside. End client is making all the right noises but no SDS yet issued.

I am slightly nervous as this is almost equivalent to getting made redundant on the Friday and starting again on the Monday as a contractor.

difference is I would not be made redundant, it’s just the FTC coming to an end.

[northernladuk]

Hi there

I am after your thoughts please.

I had an 18 month Outside role with a client (me>my ltd>agency>end client).

End client decided they hated contractors so looked to move us all to FTCs (but firstly did an IR35 determination and issued outside determinations and then said no we will not allow contractors).
I took a FTC - different site/location and new responsibilities.

My employer has now decided they made a mistake and now no longer want FTCs so want to offer day rate roles again.

So my question is:
if I do decide to move from FTC back to day rate - but with different roles and responsibilities, what is the possibility of this being determined as outside. End client is making all the right noises but no SDS yet issued.

I am slightly nervous as this is almost equivalent to getting made redundant on the Friday and starting again on the Monday as a contractor.

difference is I would not be made redundant, it’s just the FTC coming to an end.

Firstly, forget the 'almost equivalent' stuff. This one is all about the details. You say it's almost the equivalent but then point out it's nothing like so don't get hung up on that nonsense. Look at the detail.

Good news and bad news here I reckon. Firstly, Outside to FTC to Outside should be no problem. They did not say the gig was inside, they just stopped allowing work via that method. Outside, inside then outside is a real problem, particularly if it's the same gig as they've admitted it's perm work and then would be going back on themselves so there are questions to be asked. In this situation they've just said we aren't taking on outside gigs, not that the gig it's self has changed. So in my opinion, as long as they give an SDS that's been prepared with reasonable care then you should be golden.

The bad news, and this is just my opinion, is the fact you've been there 18 months already and jumped around three different roles. Although time is not directly linked to IR35 it does cause people to get lazy and become part and parcel. If you look at the whole picture, you jumping around work, doing what the client is offering you could argue there is a case for an emerging overarching contract of employment. 18 months isn't that long and a few different gigs might not be an issue but it's certainly starting on a slippery slope. If you pop up later and say you've been there three years and had five gigs then I'd start to get worried. So your problem is if the client gives you an SDS on one hand but treats you like an employee giving you new work here and there you are in a slightly ikky situation. I guess the fact the client says it's outside on the SDS could be the silver bullet but who knows. You still have an obligation to look after yourself and make sure the client knows what they are doing.

You need to think more about what the new responsibilities are each time and why you keep getting new work in different areas etc. That might make put a slightly different slant on it. As I say details details details.

[jamesbrown]

It's asking for trouble. To be clear, an FTC is employment, albeit on a fixed term. You've gone from being a contractor to the client to an employee and back to a contractor. Superficially, that's bad. Beyond the superficial, it's probably bad too. You were most likely delivering the same or similar services in the same or similar ways. Unless you can evidence a big shift in working practices (not just the project, the working practices), then it's quite likely you were inside all along. Of course, the risk is now on the client, primarily, assuming they are large or medium-sized and with a UK PE (and you mention an SDS, so I assume that is true), but I definitely wouldn't start without an SDS that indicates outside and a contract with no claw-back clauses. Even then, I'd be nervous about them changing their mind yet again, which they can easily do.

[Fred Bloggs]

The facts given say part and parcel of the organisation. Doing what you're told whilst being there a significant period of time. It reeks of mutuality of obligation and direction and control. Doubtless, there's zero chance of unfettered substitution. That's the three critical IR35 determination tests all failed.

Conclusion - The job was IR35 caught from day 1.

[northernladuk]

Hey look at me being the positive one for a change

Totally agree with the two posters above but was trying to put a bit of glitter on it

[Protagoras]

. Of course, the risk is now on the client, primarily, assuming they are large or medium-sized and with a UK PE (and you mention an SDS, so I assume that is true), but I definitely wouldn't start without an SDS that indicates outside and a contract with no claw-back clauses. Even then, I'd be nervous about them changing their mind yet again, which they can easily do.

+1

Presumably dc101's current risk arises from the pre-FTC engagement, so there may be some risk reduction if dc101's LtdCo is struck off.

My main take on this is that the migration of roles from FTC employee to Contractor could cause an investigation into the Client's SDS; to what extent would the Client defend this?

Any challenge to their SDSs could then be extended to the pre-FTC engagement SDS.

If remaining with the client, the low risk approach is to become an umbrella worker.

[northernladuk]

+1

Agree with the +1

Presumably dc101's current risk arises from the pre-FTC engagement, so there may be some risk reduction if dc101's LtdCo is struck off.

Possibly but if has a lot of money in the business he may get hit with the no LTD for 2 years issue. But closing your company isn't the answer to this one. The answer is right at the bottom.

My main take on this is that the migration of roles from FTC employee to Contractor could cause an investigation into the Client's SDS; to what extent would the Client defend this?

They would state they don't want to work with PSC's anymore, just like banks didn't. They didn't do an SDS for FTC, just decided they didn't want PSCs in. They can quite happily say yes the SDS says outside but we don't want PSC's and they are scot free. They didn't determine them as inside so there is no case to investigate.

Any challenge to their SDSs could then be extended to the pre-FTC engagement SDS.

I don't think so. They could have done it properly. They haven't changed their mind and done an incorrect blanket inside, they've just said no contractors.

The real problem is the people that stayed and flip flopped out, FTC, out. If the client had outside contractors, they all left and they started with new FTC and once they decided to end FTC's, started with a new set of contractors it would be pretty clear and dry.

The problem is the contractors that stayed now look like they are part and parcel so where the individual role might be outside there is a suspicion there could be an overarching contract of employment emerging here and that then gets complex. The contractors staying have caused the problem but not sure how the client would be on the hook if it is deemed there is an overarching contract of employment.
All a bit hypothetical now though.

If remaining with the client, the low risk approach is to become an umbrella worker.

Better still leave. It irks me 'contractors' hang on a companys coat tails like this. That's not being a contractor. The client is a mess, there is risk everywhere so just go get another gig like every contractor has to. It's our job.
Like we said a thousand times. If your client puts you inside for whatever reason, just leave and do what contractors do. The OP doesn't mention how long the FTC's were in existance but IMO they should have left there and then, got themselves another outside gig with a shiney new SDS and moved on rather than being part and parcel with a crap client and ending up in this mess.