Client will start me inside IR35 then switch me to outside?!

[FreakShow]

I'm hoping a quick sanity check question.

I'm looking for my next contract, and have been contacted with some details that seem to match to my skillset. Rate seems good, questioned the inside vs outside bit and was given the response:

"You will start for 3 months as an Inside IR35 contract, but then the 3 months after will be outside".

I queried what changes at the 3 month point in the terms and conditions, which statements in the contract will change to make it outside. The response was:

"As the client is a consultancy, the end client (their client) will change and at this point you can be deemed as outside IR35."

Now, I'll admit to not being an expert, but that seems pretty strange, doesn't it? Surely it's either one or the other, not changeable like that? I haven't got the contract to sift through, but if the only thing that will change is the end client, I'd be in my right to suggest that it's an outside IR35 role from the start, no?

[Lance]

I'm hoping a quick sanity check question.

I'm looking for my next contract, and have been contacted with some details that seem to match to my skillset. Rate seems good, questioned the inside vs outside bit and was given the response:

"You will start for 3 months as an Inside IR35 contract, but then the 3 months after will be outside".

I queried what changes at the 3 month point in the terms and conditions, which statements in the contract will change to make it outside. The response was:

"As the client is a consultancy, the end client (their client) will change and at this point you can be deemed as outside IR35."

Now, I'll admit to not being an expert, but that seems pretty strange, doesn't it? Surely it's either one or the other, not changeable like that? I haven't got the contract to sift through, but if the only thing that will change is the end client, I'd be in my right to suggest that it's an outside IR35 role from the start, no?

end client A wants a bitch to do their bidding. Inside.
end client B wants a proper contractor. Outside.

Sounds fine. Do your diligence.
Might be worth asking them for different monetary amounts for the totally different gigs.

[ladymuck]

It's outside all the way or inside all the way.

Something needs to materially change in the contract and ways of working for the status to change.

It sounds like you're a body for the consultancy to drop into different clients? It seems odd that you'd be delivering the same project to multiple clients, some who are hands on (inside) and others who are hands off (outside).

I'd want way more details before signing anything and indemnities galore over the switch to protect myself from undue attention.

[ladymuck]

end client A wants a bitch to do their bidding. Inside.
end client B wants a proper contractor. Outside.

Sounds fine. Do your diligence.
Might be worth asking them for different monetary amounts for the totally different gigs.

Maybe, the devil will be in the detail. The contract would have to be very specific which is something most agencies can't cope with as copy/paste is the extent of their capabilities.

[northernladuk]

It's entirely possible this can happen. You maybe be part of a team building something for a client which could be inside as you are just another bod coding on it for example. Once the service is deployed you go in to consultancy mode where the role changes significantly so your relationship/working practices change so fall outside. Unusual but thinking about it's not beyond the art of the possible.

All that said, you need to be super clean with this. The role MUST change. No way can you be inside then out if you are just doing the same thing and a few clauses in the contract change. That just screams as a fudge and is to be avoided. When it goes outside you need a completely new statement of work, a determination and a clear change in working practices to be anything like safe. Obviously you are the full mercy of the consultancy here and it's them that has to do this properly.

Also even if it is squeaky clean and is beyond doubt there is still a chance HMRC will still be very interested. You can't blame them for coming for a sniff if their data shows inside to out but with no detail why.

Personally if the market was OK and there was a chance of getting an outside gig in this time I'd probably leave it to be fair. A year and half ago when I couldn't find work I'd have jumped it though. It's a gamble so if the market is good and you are confident then might not be the best option.
If I needed to get billing then I'd be wanting a very detailed chat about what will change at the time of the determination change to be sure it's enough. If you don't mind working inside then you could just get on with it if you've enough confidence they are saying the right things and then just see what happens in three months. If it's a fudge you leave, if it all looks good then happy days. Nothing lost working the first three months and seeing. Depends if you think you might have gotten yourself an outside gig in that time.

[FreakShow]

Lance,

I'd agree if the contract was changed every 3 months based on the end client, but my contract is with the consultancy, not with the end client. So I'd assume one or the other as ladymuck says.

Unless the contract details something very particular to cater for the changes, but I've got no more details as of yet.

[malvolio]

I agree with Lance. If you are there for manpower replacement you are inside . If you are part of a turnkey project you can be outside. As long as the contract matches the nature of the work, what's the problem...

Just be happy the consultancy know the rules.

[SimonMac]

I'm hoping a quick sanity check question.

I'm looking for my next contract, and have been contacted with some details that seem to match to my skillset. Rate seems good, questioned the inside vs outside bit and was given the response:

"You will start for 3 months as an Inside IR35 contract, but then the 3 months after will be outside".

I queried what changes at the 3 month point in the terms and conditions, which statements in the contract will change to make it outside. The response was:

"As the client is a consultancy, the end client (their client) will change and at this point you can be deemed as outside IR35."

Now, I'll admit to not being an expert, but that seems pretty strange, doesn't it? Surely it's either one or the other, not changeable like that? I haven't got the contract to sift through, but if the only thing that will change is the end client, I'd be in my right to suggest that it's an outside IR35 role from the start, no?

If the consultancy can switch your projects from one client to another that is an indicator that the contract will be inside, unless you will be given a new contract and new SOW for the new client

[Lance]

I agree with Lance. If you are there for manpower replacement you are inside . If you are part of a turnkey project you can be outside. As long as the contract matches the nature of the work, what's the problem...

Just be happy the consultancy know the rules.

The contract would need to factor in both scenarios.
Thinking about it more.....
If ever challenged in court the contract will no longer be challenged if it allows both scenarios. The working practises will be only test.
This could probably be added to HMRC's list of unexpected consequences.

and let's see if you can be opted out from client B but not client A.
how would payroll operate though? Like a traditional inside gig where it's through the PSC? Or will it have be some umbrella and some PSC? Gonna freak out finance departments

[SussexSeagull]

In some respects I would be encouraged by this as the consultancy are seemingly doing proper assessments.