New gig sold as outside IR35 - how to make sure this is the case ?

[northernladuk]

What I also noticed is that not everyone is on the same page regarding it on this forum either. Not surprising because of the complexity of the rules

I don't see that. I'd say everyone, bar Unix's borderline trolling is about the same. A few slight deviations possibly but not bad for a bunch of contractors. If you want to talk the finer points of tax law you should be on a tax/accounting forum. Always remember that. But if you're IR35 knowledge is up to discussing the difference between chapter 8 or 10 then you are in a pretty good place knowledge wise (unless the difference is all you know about it).

Bottom line is know who the players are and what their responsibilities are and never start without a solid SDS. I am sure you will already know this but an SDS can be issued anytime up to your first pay packet and it's possible (and has happened) the verbal outside becomes inside just before payday.

Gotta say I'm with Mal's comment watching this thread.

Personally I would have walked away a long time ago.

[philgo]

I don't see that. I'd say everyone, bar Unix's borderline trolling is about the same. A few slight deviations possibly but not bad for a bunch of contractors. If you want to talk the finer points of tax law you should be on a tax/accounting forum. Always remember that. But if you're IR35 knowledge is up to discussing the difference between chapter 8 or 10 then you are in a pretty good place knowledge wise (unless the difference is all you know about it).

Bottom line is know who the players are and what their responsibilities are and never start without a solid SDS. I am sure you will already know this but an SDS can be issued anytime up to your first pay packet and it's possible (and has happened) the verbal outside becomes inside just before payday.

Gotta say I'm with Mal's comment watching this thread.

It's not negative. Almost everyone is having very good knowledge on it specially around chapter 8 and 10 with their differences. So it's helping me a lot to get the right understanding.

However for the interpretations, by the nature of its, they slightly diverges. This is normal as rules are very complex and my situation not clear enough. It's getting clearer though.

Walking away is not always the best solution to improve knowledge but I agree is for sure way easier.

[WTFH]

However for the interpretations, by the nature of its, they slightly diverges. This is normal as rules are very complex and my situation not clear enough.

This is very true. People can only share their explanations based on two things:
1. What they know
and
2. What you (choose to) tell them

If point 2 is incomplete/inaccurate, then people will make assumptions. Something that you consider unimportant/irrelevant or that you are unwilling to share for whatever reason, that may be a key that would make answering the question a bit easier. It might also mean that the answers given would be very different if that piece was disclosed.

If your IR35 position is difficult, or the lines between the agency (consultancy?) and client are muddied, or there are other factors, then maybe the best solution is to go through an umbrella company and let them deal with the pain.

[philgo]

If your IR35 position is difficult, or the lines between the agency (consultancy?) and client are muddied, or there are other factors, then maybe the best solution is to go through an umbrella company and let them deal with the pain.

If I cannot get more clarity within the next two days I might offer this solution to the agency.

[northernladuk]

If I cannot get more clarity within the next two days I might offer this solution to the agency.

Need to check early with them to see if they have a preferred list of umbrellas as they will be getting kick backs. You need to do your research on them which will take even more time up. Be prepared to tell them you want Clarity Umbrella or walk and then play last to blink wins with them. If they won't bend then you are going to have to find the best of the bad list they offer.

[philgo]

There is no SDS under Chapter 8.

It sounds like you and the agent/consultancy are equally confused, TBH.

Under Chapter 10, the SDS is the responsibility of the "end client", which is almost certainly the consultant's client in your chain. The Fee Payer is liable, in the first instance, and is almost certainly the consultant in your chain. But there is a small possibility that this is a fully outsourced/managed service, in which case the consultant is both the end client and Fee Payer. Very unlikely. In that case, there's a further chance that the consultant is small under the CA 2006 definition, in which case no SDS is needed. Again, there seems to be a litany of cluelessness in your supply chain.

Indeed under chapter 8 it's a Status self assessment! I guess this might be were one of the confusion could lie.

Got written reply from the agent :
"I can confirm that "XX company" (so his company) is responsible for determining the IR35 status. Our agreement with "End Client" is to supply consultancy services, and we meet all IR35 obligations."

Trying to summarise :
(a) "XX Company" is in charge to do the role SDS and provided me with a "Role SDS report". It's branded from Qdos.
Anyone knows how SDS should look like exactly? This one is showing "It is Qdos’ opinion, based on the information provided, that the role, XXX for XX company is Outside of IR35" and then I see a set of 12 questions where agent replied YES or NO. It does not seem to be a very deep assessment but I might be wrong.

(b) "XX Company" also sent me the template contract where is mentioned under services section that "The Agency hereby engages the Consultancy on behalf of the Client." So my PSC is the consultancy and the intermediary is the agency.

(c) If I understood correctly the rules, (a) seems wrong as should be done by end client and not the agency unless this is fully contracted out.

(d) If fully contracted out it means end client becomes the agency but as the agency is small he should not have provided me with a SDS report so it seems also wrong. Unless what he provided is not a solid SDS hence my question above.

[philgo]

Need to check early with them to see if they have a preferred list of umbrellas as they will be getting kick backs. You need to do your research on them which will take even more time up. Be prepared to tell them you want Clarity Umbrella or walk and then play last to blink wins with them. If they won't bend then you are going to have to find the best of the bad list they offer.

I don't feel like they work with umbrella companies so could offer the compliant one I was using previously.

[philgo]

It's fairly straightforward:

1. Are you working on an end client site and/or interacting with end client staff regularly (client being the entity that commissioned the service, not the consultancy/agency)?
2. Is the end client a medium or large company according to the CA 2006?

If your answer to both of these questions is "yes", then the contract falls under Chapter 10 and you must insist on an SDS from the end client (via the agent/consultancy). You should also check the contract carefully for claw-back clauses, which may work, in principle. This has nothing to do with overriding statute law. If your answer to (1) is "no", then it may be a fully outsourced service and you should answer (2) with respect to the consultancy, which is then the "end client" in your chain. If the answer to (2) is "no", then it's Chapter 8 (aka "old IR35"), else Chapter 10.

The only real complexity here is whether it is truly an outsourced service if the answer to (1) is "no". In most cases, and I suspect in your case, the answer to (1) is clearly "yes", so there is really no complexity.

Going back to this as my understanding is now much better.

For (1) I will be working partly at client site and my home office. I might agree to go 2 or 3 days a week at client side depending on the needs and client update requirements. I guess I should still say (1) = yes as I am going to go often there. right?

Regarding "fully outsourced service" where is this usually mentioned? Contract or assignment schedule ?

In contract shared by agency under Service section I can read :
"If the Consultancy is a PSC, the Old Rules apply to the Services if the Client is a Small Client (and
clause 3.11 will apply), or the New Rules apply to the Services if the Client is a
Medium/Large/PA Client (and clause 3.12 will apply)."
So it ties back with previous discussions.
So If not contracted out, end client is IMO not small and therefore SDS should be done by client under chapter 10 with agency liable for tax management.

Forgetting above and looking at this high level
With the written confirmation from the agent saying he is responsible for the SDS, am I not more secured if issues later on this part?
Then I will need to get checked the contract and have the correct working practice.

[northernladuk]

What a car crash this thread is turning out to be... but not unsurprising.

For (1) I will be working partly at client site and my home office. I might agree to go 2 or 3 days a week at client side depending on the needs and client update requirements. I guess I should still say (1) = yes as I am going to go often there. right?

You've completely misunderstood what he's asking. Further evidence in the next comment as well. He wasn't talking about travel and attendance on site, he's talking about your model of engagement which will differ between someone just making up a body in a clients team where your working colleagues will be the client staff of if you are part of a team delivering to a client where the consultancy bods are your work colleagues and you interact with the client to deliver.

Regarding "fully outsourced service" where is this usually mentioned? Contract or assignment schedule ?

How can you not know this? This is your job to deliver services to clients so why do you not understand the different ways you do this? Did they not tell you what they do at interview, did you not ask them if they didn't? How can you take a job and try and sort through the IR35 mire when you don't even know what you are in the chain?

It starts making sense now. IR35 is about being in business in your own right, if you can't understand your business then trying to unravel IR35 is going to be impossible.

In contract shared by agency under Service section I can read :
"If the Consultancy is a PSC, the Old Rules apply to the Services if the Client is a Small Client (and
clause 3.11 will apply), or the New Rules apply to the Services if the Client is a
Medium/Large/PA Client (and clause 3.12 will apply)."
So it ties back with previous discussions.
So If not contracted out, end client is IMO not small and therefore SDS should be done by client under chapter 10 with agency liable for tax management.

Again, how do you not have a clue what size your clients are? Granted when it comes to small consultancies it can be a bit border line but any client using a decent size consultancy is unlikely to be small. The definition on the HMRC website is very clear.

Your company will be ‘small’ if it has any 2 of the following:

• a turnover of £10.2 million or less
• £5.1 million or less on its balance sheet
• 50 employees or less

Did you not research the consultancy and client when you found out who they were and probably know this already?

Forgetting above and looking at this high level
With the written confirmation from the agent saying he is responsible for the SDS, am I not more secured if issues later on this part?
Then I will need to get checked the contract and have the correct working practice.

Honestly this is very frustrating. This is contracting 101, I mean super basic. It's just tick box IR35 like I mentioned before.

Go umbrella until you understand the basics. Do the first 3 months and then just switch to LTD when you are ready. Easy enough to do at renewal time. You're making a right pigs ear of this.

I don't feel like they work with umbrella companies so could offer the compliant one I was using previously.

What do you mean you don't 'feel' they do? What makes you feel that? I'd be extremely surprised to say the least if they don't bearing in mind the total lack of outside gigs around. Pretty dumb agency model if they don't want to work with inside contractors and/or umbrellas. Also looking at this dogs dinner it doesn't appear they know much about IR35 either so can't believe they are the unicorn agency that can survive on outside gigs only.

And 'compliant' umbrella. I'll bet people on this thread sucked air through their teeth when the read that? Compliant with what? They have QC and HMRC approval? Their scheme is compliant UK tax legislation? Maybe you've just picked the wrong word but we've got a lot of people on here that have been sold 'compliant' schemes and are near suicidal in some cases once it's unraveled. I might have misread this one I'll admit but I think it's right to check what you mean by compliant. Even if they are legit are they stealing your holiday pay or had your information leaked? There aren't many good umbrellas around. Just name them and we'll tell you if they are OK. Better still go with Clarity Umbrella if you can.

[northernladuk]

Agent sent me the IR35 SDS report that "he generated again this morning". The doc is from Qdos so assuming he is using Qdos tooling. The agent answered 12 questions to get status OUT IR 35. So it sounds like agency is in charge to determine the status.

I don't think so. I think they've just filled it out on your behalf and are paying lipservice to the whole process. You mention below they originally said it was you which I'll bet they did say. We've seen that plenty of times. I just can't understand how they can do this. Very few contractors know what the three pillars are let alone the difference between fettered and unfettered substitution and even if they did they don't know if the client will allow it at all.

Good for my records but does not mean this is right as agency might have answered differently from what is written in contract and not taking into account the reality of the working practice. Looking at the website it seems to be an agency offering clients to find expert for them via services like assignment (in this case) , SOW or perm hiring.

Correct. That chance of it reflecting most clients requirements are slim to nil. I'll bet they've sold this service to clients who are struggling to get their heads around it and do it on their behalf which is bad for the client as well.

I did ask him to confirm whether his company is in charge of the SDS instead of the end client where the labour will be done.

I mentioned this in my previous reply. It's very little to do with WHERE it's done but WHO FOR and HOW.

Initially he said to me I would be the one doing the determination but it sounds like I misunderstood or he changed the version.
Waiting his reply now.

As I say I bet you heard right but because you've been trying to get to the bottom of all this they've just gone ahead and done it.

If agency is in charge of SDS, I guess it means contract falls under chapter 8 explaining why he is doing the assessment himself instead of the client. Does this make sense?

Guessing an important piece of tax legislation based on some dumb ass agency carry on doesn't make sense to me let alone the rest of it. But no, it doesn't make sense.

Then on the going regularly to client site posing issue under chapter 8, is this really an issue as long as I agree my planning with end client?

No, location has next to nothing to do with IR35. Many legitimate businesses operate solely on clients premises.