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

**WTFH** · 30 December 2023, 16:11

Originally posted by philgo View Post

…My understanding is that the contract will be between my LTD and the agency/consulting LTD which will also have a contract in turn with the end client.

I do not have a Status Determination Statement yet. When I asked for it the agency said their are responsible for it as being my direct client and that I will have to answer a questionnaire in due course. Is that a possible normal scenario ? I am not sure I got this right so please bear with me as I am trying to clarify things with the agency.

This being said, could you please guide me about what I need to know/ask to the agency to make sure things are under control?

Best
Philippe

OK, the question is are you working through an employment agency, or through a consulting company. You used both words in one piece and then referred to them as an agency after that.
So, which is it, agency or consultancy?

**philgo** · 30 December 2023, 16:26

Originally posted by WTFH View Post

OK, the question is are you working through an employment agency, or through a consulting company. You used both words in one piece and then referred to them as an agency after that.
So, which is it, agency or consultancy?

Indeed so the contract is a "scheduled assignment" between "XXX LTD" (what I referred as the agency) and my LTD.
"XXX LTD" is registered as "82990 - Other business support service activities not elsewhere classified"

"XXX LTD" has another contract with end client and will use my service to work on it.

**malvolio** · 30 December 2023, 16:28

If the client is a small company as defined under IR35 the old Chapter 8 rules apply and you make the determination.

If its under Chapter 10, it is the client's decision and the client's risk If they are wrong.

I'll give you good odds your contract will contain a clause to make you liable if they're wrong...

**philgo** · 30 December 2023, 16:35

Originally posted by malvolio View Post

If the client is a small company as defined under IR35 the old Chapter 8 rules apply and you make the determination.

If its under Chapter 10, it is the client's decision and the client's risk If they are wrong.

I'll give you good odds your contract will contain a clause to make you liable if they're wrong...

Right, so the end client is above limits of 50 people and maximum turnover.

However "XXX LTD" (consultant agency) is defo a small company meaning they are falling under chapter 8 which explains why the contact agent told me I would have to determine the status myself using a tool they will provide me. That's the way around it...
Does this seems okay ?

Also I am wondering what kind of contract is "XXX LTD" signing with the end client....

**jamesbrown** · 30 December 2023, 16:53

Originally posted by philgo View Post

Right, so the end client is above limits of 50 people and maximum turnover.

However "XXX LTD" (consultant agency) is defo a small company meaning they are falling under chapter 8 which explains why the contact agent told me I would have to determine the status myself using a tool they will provide me. That's the way around it...
Does this seems okay ?

Also I am wondering what kind of contract is "XXX LTD" signing with the end client....

Unlikely. It would need to be a fully contracted out service whereby the consultancy is performing the work independently of the client (beyond requirements etc.). If you're a BoS at a client site, it's a labour supply under Chapter 10 and the client will be responsible for the SDS and the agency will be liable for errors, in the first instance, but as Mal noted, check the contractual terms for transfer of liability.

**malvolio** · 30 December 2023, 17:09

And don't use their tool. Get a contract review from an independent source, preferably one that looks at the whole thing not just IR35.

**philgo** · 30 December 2023, 18:02

Originally posted by jamesbrown View Post

Unlikely. It would need to be a fully contracted out service whereby the consultancy is performing the work independently of the client (beyond requirements etc.). If you're a BoS at a client site, it's a labour supply under Chapter 10 and the client will be responsible for the SDS and the agency will be liable for errors, in the first instance, but as Mal noted, check the contractual terms for transfer of liability.

Not sure I understand all of that but what I know is that I should try to get a draft contract from the consultancy ASAP and check the terms.

Then, I am not surprised but it seems very very complicated to work outside IR35 now days, not like pre 2021.
It clearly shows that the rules put in place by the gov are subject to far too many interpretations depending on too many factors so essentially going against this business.
I am not even talking about the massif tax increase with dividend allowance reduction and the increase of the CT tax versus pre 2021.
For people only looking only at the net income in pocket, the sad reality is that all the work and prep you have to put in place on top of work you have to do for clients does not overly surpass a contract inside IR35 anymore. I would say it's even less paid for some contracts and the worst is that you can get investigated down the line by HMRC even if you have tried to be careful. They clearly destroyed this industry.

**philgo** · 30 December 2023, 18:07

Originally posted by malvolio View Post

And don't use their tool. Get a contract review from an independent source, preferably one that looks at the whole thing not just IR35.

The Accountancy company I will chose would do or not ?

**escapeUK** · 30 December 2023, 18:20

Originally posted by malvolio View Post

I'll give you good odds your contract will contain a clause to make you liable if they're wrong...

Their clause cannot override the law.

Originally posted by philgo View Post

They clearly destroyed this industry.

Name me one thing they didn't destroy.

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