Contracting via consultancy

[Kanye]

I currently contract my ltd co > consultancy > end client.

Where would that leave me with regards to IR35?

Is it my working practices between me and the consultancy that are important here, or me and the end client?

My working practises with the consultancy are very clearly outside, but after 2+ years with the end client I'm starting to get a bit nervous as its difficult not to become part of the furniture to be honest.

I was hoping to start collecting some evidence and logs for a bit of documentary evidence of working practise, but which relationship should I focus on when doing this?

[MyUserName]

It is you and the client.

On a day to day basis, how are you different to an employee.

Your contract is one thing but it is not the most important.

How are you actually different in practice?

[pmeswani]

I currently contract my ltd co > consultancy > end client.

Where would that leave me with regards to IR35?

Is it my working practices between me and the consultancy that are important here, or me and the end client?

My working practises with the consultancy are very clearly outside, but after 2+ years with the end client I'm starting to get a bit nervous as its difficult not to become part of the furniture to be honest.

I was hoping to start collecting some evidence and logs for a bit of documentary evidence of working practise, but which relationship should I focus on when doing this?

The question is, are you told how to do your job, or are you given an expectation of the output (i.e. get something installed at clientco without any problems), which means you can go about doing your job without being directed in how to do it by the consultancy?

The 2 year rule shouldn't have a bearing, as I am sure there have been contractors who have been working at clientco sites for 6 or 7 years, if not more. The 2 year issue relates to whether you can claim expenses, and not how your working practices are.

[northernladuk]

I asked this not so long ago. Here is the link to the thread.

http://forums.contractoruk.com/busin...ts-client.html

The consultancy is your client so it is them that you be a hidden permie for. I pondered the comments from my post for awhile and I don't think being treated as a permie by your clients client should be a problem as it isn't them that is 'employing you' so you are just being professional representing your client. It is how your client treats you I think.

Either way I am in a similar position but I make an effort to make sure I am treated differently at my clients client as well as direct to my client. For example. We had our badges issued at the clients client and they were permie coloured (why I don't know as we were through a consultancy) but I pointed this out and got a different coloured contractor one and so on. Just to keep my nose super clean IR35 wise.

Although I don't see a problem you acting as an employee of your client when on their clients site technically I think you should still not fall in to 'holidays' etc. Stay vigilant and so on.

The 2 year rule, although not related to IR35 will have bearing if you are on a site for more than 2 years of course.

[LisaContractorUmbrella]

Surely this has to come down to supervision, direction and control? I can't quite see how a third party can exercise a suitable level of any of these to have significance within IR35 - as far as I am aware all IR35 cases have been determined according to the relationship between the contractor and the end client.

[jamesbrown]

I asked this not so long ago. Here is the link to the thread.

http://forums.contractoruk.com/busin...ts-client.html

The consultancy is your client so it is them that you be a hidden permie for. I pondered the comments from my post for awhile and I don't think being treated as a permie by your clients client should be a problem as it isn't them that is 'employing you' so you are just being professional representing your client. It is how your client treats you I think.

Either way I am in a similar position but I make an effort to make sure I am treated differently at my clients client as well as direct to my client. For example. We had our badges issued at the clients client and they were permie coloured (why I don't know as we were through a consultancy) but I pointed this out and got a different coloured contractor one and so on. Just to keep my nose super clean IR35 wise.

Although I don't see a problem you acting as an employee of your client when on their clients site technically I think you should still not fall in to 'holidays' etc. Stay vigilant and so on.

The 2 year rule, although not related to IR35 will have bearing if you are on a site for more than 2 years of course.

I'm in the same position and this is consistent with the professional advice that I've received from a number of sources; it's the relationship with the consultancy that would matter in terms of D&C, not the client's client. But I agree w/r to ensuring that you're treated differently by the client's client - a sensible approach. You're not an employee of anyone, so don't act like one. Indeed, I haven't seen a precise definition of the "end client" from HMRC w/r to IR35.

[malvolio]

There was an early case that the contractor won because Hector went after the wrong end client. The case fell over when it was ruled that teh client (FoMoCo, I think) had no control over the contractor's work. Had they gone for the intermediate consultancy that the contractor worked for though...

[northernladuk]

Surely this has to come down to supervision, direction and control? I can't quite see how a third party can exercise a suitable level of any of these to have significance within IR35 - as far as I am aware all IR35 cases have been determined according to the relationship between the contractor and the end client.

3rd part as in your clients client? I think you would be surprised. These consultancies often throw a couple of heads in positions that are nothing to do with the original service contract and then let their client do with them as they wish. They can't turn down the extra revenue for that head, particularly when firms are trying to cut head count and hide them in a managed service contract. If that odd person is beyond the original scope of the contract between the two business they can be left to do as the end client bids.

[Kanye]

Seems there is a degree of disagreement on this thread!

My problem is that I have a cristal clear outside IR35 relationship with the consultancy. No control, no tools, no direction, no benefits whatsoever, very little interaction with them to be honest and Ill probably only be here for the one project.

But with the end client I feel like I'm sailing slightly close to the wind.

A key question to resolve. I'll look into the cases mentioned and report back...

[northernladuk]

Seems there is a degree of disagreement on this thread!

My problem is that I have a cristal clear outside IR35 relationship with the consultancy. No control, no tools, no direction, no benefits whatsoever, very little interaction with them to be honest and Ill probably only be here for the one project.

But with the end client I feel like I'm sailing slightly close to the wind.

A key question to resolve. I'll look into the cases mentioned and report back...

I don't see disagreement. Lisa raises a question and Mal points out some case law where they tried to come after the consultants client and it fell over which would actually be in your favour.

Why do you feel you are sailing close to the wind though? Because you feel like a permie at the consultancies client? Is there nothing you can do to differentiate yourself to both parties?