IR35 and your clients client.

**TheFaQQer** · 8 March 2012, 14:56

Can I be the first to ask if you're cut out to be a contractor?

I haven't read the post yet, but wanted to be first!!

**northernladuk** · 8 March 2012, 15:00

Originally posted by TheFaQQer View Post

Can I be the first to ask if you're cut out to be a contractor?

I haven't read the post yet, but wanted to be first!!

You were indeed the first and win a

you smug b'stard

I think I need a smilie with a tin hat under heavy fire for this thread don't I.

EDIT...

sorted.

**Antman** · 8 March 2012, 15:03

Originally posted by TheFaQQer View Post

Can I be the first to ask if you're cut out to be a contractor?

I haven't read the post yet, but wanted to be first!!

WTFS, plus first timers guide is over on the right n' all - arf-arf!

**TheFaQQer** · 8 March 2012, 15:03

Originally posted by northernladuk View Post

You are contracted to a small consultancy. They place you in their large client alongside other contractors and the consultancies perm staff.

Where does IR35 start and end in this scenario? Your contract is with the consultancy, is outside IR35 and your working practices to the consultancy reflect this. You are clearly acting as a service providor to the consultancy.... but......... you are based on the clients site.

In an investigation will they consider the way the client treats you? Can you be deemed a hidden permie when you are not contracted to them? Your contract is with the consultancy.

I think that it would be the relationship between you and the consultancy which is the one that matters. How the end client sees you is immaterial, since they aren't a party to the contract between you and the consultancy. The contract is between you and the consultancy, which is all that HMRC can investigate.

Originally posted by northernladuk View Post

I am taking worst case here, it is quite likely the client will treat you as a 3rd party so helping your IR35 case i.e. different coloured badges, carparking etc but what if they don't? If the client treats you as a permie of the consultancy does that put you in a tight spot?

I don't think so. I don't think that it would impact your IR35 status even if the relationship was you > consultancy > client in a complete outsourcing deal where the consultancy runs an entire department for the client. The contract is you to consultancy which is what matters.

(For the purposes of this post, "you" is defined as "you and / or your Ltd company")

**northernladuk** · 8 March 2012, 15:12

Originally posted by TheFaQQer View Post

I don't think so. I don't think that it would impact your IR35 status even if the relationship was you > consultancy > client in a complete outsourcing deal where the consultancy runs an entire department for the client. The contract is you to consultancy which is what matters.

This is my thinking but wondering if the consultancy putting you on the client site as they would a permie, so representing you as their permie muddies the water. There isn't much evidence of how you deliver to the consultancy so would it need extra diligence with both parties. If HMRC can't demostrate your working process's with the consultant they will go sniffing at the client.

**rd409** · 8 March 2012, 15:32

Originally posted by northernladuk View Post

This is my thinking but wondering if the consultancy putting you on the client site as they would a permie, so representing you as their permie muddies the water. There isn't much evidence of how you deliver to the consultancy so would it need extra diligence with both parties. If HMRC can't demostrate your working process's with the consultant they will go sniffing at the client.

Answer the questions

1) If the end client terminates the consultancy contract, does the consultancy have to find you another work?
2) If the consultancy asks you to work on another client, can you say refuse to accept the assignment?
3) Do the consultancy pays you in between assignments for just sitting in a corner of the office?

You pretty much get the idea now, I guess.

**LisaContractorUmbrella** · 8 March 2012, 15:40

In recent IR35 cases HMR&C have not considered much beyond the relationship between the contractor and the end client. The contract with the consultancy can be written to include absolutely anything

**TheFaQQer** · 8 March 2012, 15:40

Originally posted by northernladuk View Post

This is my thinking but wondering if the consultancy putting you on the client site as they would a permie, so representing you as their permie muddies the water. There isn't much evidence of how you deliver to the consultancy so would it need extra diligence with both parties. If HMRC can't demostrate your working process's with the consultant they will go sniffing at the client.

I'm not sure that they would go to the client without the client telling them that it is nothing to do with them - how the client views you is irrelevant because they have no influence over you. There is no pseudo-employment relationship between you and the end-client, no matter how they think of you - the only relationship that matters is the contract (and working practices) between you and the consultancy.

In the past, I've not worried about whether the end-client sees me as a permanent employee of the consultancy or not - no-one at the consultancy thinks of me as a permie, which is what matters. One of my early contracts had a clause in the contract which said that I should present myself to the client as if I were an employee of the consultancy - it had nothing to do with the relationship between me and the consultancy, but everything to do with the client not realising that the "expert consultancy" didn't have the requisite skills to fulfil the contract.

**Londongal76** · 8 March 2012, 15:49

Interesting that you say they can't be interested in your clients/client and that contract. I have a friend being audited at the moment, and they are very interested in the clients contract with the company they placed them in and the working practises.

IR35 and your clients client.