Consultancy MSA and IR35 Red Flags

[ziggystardust]

Consultancy will be sending an MSA to sign and Associates letter to engage me to work with the end client for an outside IR35 gig. I have not encountered an MSA before or contracted via a consultancy, only agencies previously.

Interestingly they will not release details of the MSA until I have provided references etc. and are keen to get me "onboarded" as quickly as possible. Already I am concerned as my contact at the consultancy has talked about regular meetings with a direct lead/mentor (not end client) to provide ongoing support throughout the contract. I have been sent their Consultants hand book and even background images to be used when holding meetings on Teams which shows the consultancy logo. Added to that, they are planning to assign me with an email address with their consultancy name in and not the end clients.

However, am I right to be concerned that the above could constitute me being treated almost as an employee to the actual consultancy making both themselves and consequently myself fall foul of IR35 legislation? They have stated that their MSA reduces the risk and that the client has deemed my role as Outside but I am already having doubts even before reviewing it and assume that this alone is not sufficient to form my actual contract, but not sure so would appreciate some pointers.

[northernladuk]

Are you going to be issued an SDS before you start stating it's outside and do they know that they carry the risk for that determination? That's key for you. They are allowed to issue/change it right up to first payment but best if you can get an outside SDS before you start. Once you've got that (and it's been done properly) then you should be covered.

Most of the stuff you've mentioned is a flag but not the be all and end all. The work you deliver makes up part of the package of work the constulancy delivers to the client so professional courtesy to use their templates when presenting to their customer etc. The whole outcome is from the consultancy to the client even if there are independant contractors producing it if you get me. It doesn't necessarily mean you are being treated like an employee. Email is pretty irrelevant really. The main pillars are still RoS, (lack of) MoO and D&C. You need to look at those first to see what's going on, then look at what and how you will be delivering i.e. bum on seat or SoW type work and go from there.

[Lance]

As NLUK says, get an SDS as that is the main determining factor for your concern.

Appearing as a consultancy staff member to the client is not an indicator of MOO, SDC or ROS. In fact small consultancies may often work through larger consultancies and have to "white label" themselves as the larger firm.

So I'd ignore all of that an focus on the SDS, and the actual contract/MSA. An MSA is likely to allow them to move you around under one contract but with a separate SOW for each work package.

[ladymuck]

Depending on how small the consultancy is, they might argue they are exempt as a small business from issuing a SDS. In that scenario, be very sure you're happy with the contract and make sure you get it professionally reviewed before you sign it and turn up for your first day.

A good company would let you see a template version of the contract / MSA. Maybe ask for that as they might have interpreted your request as you wanting the contract to be issued before they've done their due diligence checks.

[jamesbrown]

Unless it’s a fully outsourced supply (it probably isn’t), then it’s the size of the end client that matters, not the consultancy.

As others have said, these pointers are not irrelevant, but they’re also not determinative. Make sure you get the SDS from the end client and, more importantly, that there are no claw back clauses in the MSA.

[eek]

Depending on how small the consultancy is, they might argue they are exempt as a small business from issuing a SDS. In that scenario, be very sure you're happy with the contract and make sure you get it professionally reviewed before you sign it and turn up for your first day.

A good company would let you see a template version of the contract / MSA. Maybe ask for that as they might have interpreted your request as you wanting the contract to be issued before they've done their due diligence checks.

A small consultancy claiming Small Business Exemption may or may not be valid depending on the work you are doing.

Project Fully managed by consultancy then the Small Business Exemption is valid, bum on seat at end client working with a team of end client devs - probably not that valid.

[ladymuck]

A small consultancy claiming Small Business Exemption may or may not be valid depending on the work you are doing.

Project Fully managed by consultancy then the Small Business Exemption is valid, bum on seat at end client working with a team of end client devs - probably not that valid.

Absolutely and it's something the OP needs to be mindful of and be prepared to argue over.

[northernladuk]

As per the above two comments. Even if it starts out right, small consultancies have a habit of using any resource available so just keep an eye on working practices that they don't start asking you to do stuff that's not in the SoW and moving you around willy nilly. There is a difference between you delivering multiple bits of work to the SoW and becoming part and parcel and falling foul of D&C.

[rocktronAMP]

Depending on how small the consultancy is, they might argue they are exempt as a small business from issuing a SDS. In that scenario, be very sure you're happy with the contract and make sure you get it professionally reviewed before you sign it and turn up for your first day.

A good company would let you see a template version of the contract / MSA. Maybe ask for that as they might have interpreted your request as you wanting the contract to be issued before they've done their due diligence checks.

Yes if it is a small business there is an exemption rule of annual turnover, I think of £10.2 million in a financial year and a balance sheet total of £5 million.
But get an SDS because these small business exemptions are defunct if your consultancy is part of payment supplier chain, which involves a bigger legal entity (bigger consultancy).

[jamesbrown]

Again, the size of the business that matters is the end client. So unless the consultancy is the end client, the size of the consultancy is irrelevant. The consultancy is only the end client when the service is fully contracted out to the consultancy to deliver. This will be incredibly rare in practice, but it can happen for services that are very tightly defined with a clear SoW. In that case, you will have no contact with an end client other than the consultancy, you will only work with them, only report to them, only deliver to them.