Accountingweb IR35 article for clients

[JohntheBike]

IR35 in the private sector: What businesses need to know | AccountingWEB

can someone explain what this means, I've not seen any discussion on it -

What is an end-user?

The term “end-user” refers to the entity receiving the service which the off-payroll worker personally provides.

The current public sector IR35 rules include a fully contracted-out service exception and this exception is expected to form part of the private sector IR35 rules from 6 April 2020.

Under this exception, a party that is provided with a fully contracted-out service by another party, in circumstances where the workers who help deliver that service do not personally provide services to the recipient, is not treated as an end-user for these purposes and should not need to make an IR35 determination.

Where the recipient of the fully contracted out service is not an end-user, the provider could be considered an end-user if, to deliver it, they engage and receive the services of workers who personally provide those services to the provider through their own intermediaries.

In determining whether someone is an end-user it will therefore be necessary to consider whether they have been provided with a fully contracted out service which qualifies for the exception, or the personal service of workers.

In practice it might not always be straightforward to identify whether a fully-contracted out service has been provided and who the end-user is. It is hoped that guidance will be published alongside the draft legislation


Does this mean that if an individual is providing services through their own limited company via a software house to the client, the "end user", then that client is exempt from the rules and it is the software house which will be required to administer the rules?

[Qdos Contractor]

In theory yes, providing the services are genuinely outsourced and managed by the software house. It's part of the reason why there has been a recent push towards Statement of Work type arrangements.

It was very prevalent in the public sector and there is HMRC guidance here.

[northernladuk]

Wow.. And you are leading the charge against IR35?

[JohntheBike]

Wow.. And you are leading the charge against IR35?

I've never claimed to know the minutest of details about the new regulations.

I've had occasion to advise "experts" on particular issues of interest to me which they were not aware of.

[JohntheBike]

In theory yes, providing the services are genuinely outsourced and managed by the software house. It's part of the reason why there has been a recent push towards Statement of Work type arrangements.

It was very prevalent in the public sector and there is HMRC guidance here.

thanks for this confirmation. This is in fact the way I work in the private sector. So I need to be abreast of any issues affecting this structure.

[northernladuk]

I've never claimed to know the minutest of details about the new regulations.

I've had occasion to advise "experts" on particular issues of interest to me which they were not aware of.

Understanding what service you offer and therefore the determining party is hardly minute.

Even more worrying when this is exactly what was discussed infinitum during the Public Sector role out and is well documented so nothing has changed in the last year+

[JohntheBike]

Understanding what service you offer and therefore the determining party is hardly minute.

Even more worrying when this is exactly what was discussed infinitum during the Public Sector role out and is well documented so nothing has changed in the last year+

"nothing has changed in the last year"

I wasn't a contributor last year, so I wasn't party to the discussions. There was no discussion that I was aware of on this issue in another place, but then I am prone to senior moments!

[northernladuk]

"nothing has changed in the last year"

I wasn't a contributor last year, so I wasn't party to the discussions. There was no discussion that I was aware of on this issue in another place, but then I am prone to senior moments!

Have a read of this sticky that is at the top of this very part of the forum..

https://www.contractoruk.com/forums/...bout-ir35.html

and any of the many many articles on this on the web.

[JohntheBike]

Have a read of this sticky that is at the top of this very part of the forum..

https://www.contractoruk.com/forums/...bout-ir35.html

and any of the many many articles on this on the web.

looks like I've been watching in the wrong organisation's fora!

[JohntheBike]

In theory yes, providing the services are genuinely outsourced and managed by the software house. It's part of the reason why there has been a recent push towards Statement of Work type arrangements.

It was very prevalent in the public sector and there is HMRC guidance here.

So let's take a specific historical example. Computer Sciences Corporation used to provide IT support in a number of areas for MG Rover. They did this by using a mixture of permanent employees and contractors. The employees tended to be managing teams of contractors. How would this structure have fared under the new rules?

Do we have examples of public sector clients using software houses who are exempt and where the software house is applying the rules?

edit
Some CSC contractors provided their services to MG Rover from CSC premises and through an agency. I currently supply my services through a software house to a client and do not reside at the client's site. Additionally there is no intermediate agency. So how would that structure likely fare under the new rules?