Are MSP also considered inside?

[Lance]

OK. I assume that you would be able to work out what I am saying. I realize I need to more clear with my language.

I was not implying that BT would be considered inside, I am referring to STAFF of BT being considered inside when placed at clients in the same way that contractors are place STAFF at clients.

I am a permie staff member of my limited company. My question is should clients be considering the IR35 status of STAFF of MSPs placed at said clients on contracts that are no different compared to the contracts that so called "PSC" are on.

Yes.

Personal service company versus managed service company, how can one distinguish between the two in the context of determining the IR35 status of their employees.

A director of the company is doing the work.

Simple stuff really.

[Lance]

I am sure it is against some competition law to force companies in to PAYE when competing with other companies that are not forced in to PAYE. I will look in to this, I am not a lawyer though.

Just because you don't like it, that doesn't make it illegal.

[pr1]

OK. I assume that you would be able to work out what I am saying. I realize I need to more clear with my language.

I was not implying that BT would be considered inside, I am referring to STAFF of BT being considered inside when placed at clients in the same way that contractors place STAFF at clients.

I am a permie staff member of my limited company. My question is should clients be considering the IR35 status of STAFF of MSPs placed at said clients on contracts that are no different compared to the contracts that so called "PSC" are on. Personal service company versus managed service company, how can one distinguish between the two in the context of determining the IR35 status. Why should clients ignore the IR35 status of contracts with MSP but be forced to determine the IR35 status of contracts with so called "PSC".

I am sure it is against some competition law to force companies in to PAYE when competing with other companies that are not forced in to PAYE. I will look in to this, I am not a lawyer though.

ESM8045 - Employment Status Manual - HMRC internal manual - GOV.UK

Where the intermediary is a company, the following conditions must be satisfied for the legislation to apply:

the worker (or their associates) has a material interest in the company

“Material interest” is defined as meaning:

Beneficial ownership of, or the ability to control, directly or indirectly more than 5% of the ordinary share capital of the company; (...)

The BT employee has <5% shares in BT so is unaffected by IR35

[PeterSim]

Hang on, when you say permie staff, what exactly are you referring to. Maybe I misunderstood.

If MSP staff are going to be audited for IR35 in exactly the same way then I have no argument here. As far as I was aware they are not considering them because everyone is fixated on this term PSC, which as far as I am aware they invented for the purpose of the IR35.

[cojak]

OK. I assume that you would be able to work out what I am saying. I realize I need to more clear with my language.

I was not implying that BT would be considered inside, I am referring to STAFF of BT being considered inside when placed at clients in the same way that contractors place STAFF at clients.

I am a permie staff member of my limited company. My question is should clients be considering the IR35 status of STAFF of MSPs placed at said clients on contracts that are no different compared to the contracts that so called "PSC" are on. Personal service company versus managed service company, how can one distinguish between the two in the context of determining the IR35 status. Why should clients ignore the IR35 status of contracts with MSP but be forced to determine the IR35 status of contracts with so called "PSC".

I am sure it is against some competition law to force companies in to PAYE when competing with other companies that are not forced in to PAYE. I will look in to this, I am not a lawyer though.

Staff of consultancies are not affected by IR35.

Because they're staff.

Definition of staff: permanent employees.

(Although some spectacularly incompetent HR departments are currently arguing otherwise...)

[ladymuck]

Just because you don't like it, that doesn't make it illegal.

If I had a pound....

[PeterSim]

ESM8045 - Employment Status Manual - HMRC internal manual - GOV.UK

Where the intermediary is a company, the following conditions must be satisfied for the legislation to apply:

the worker (or their associates) has a material interest in the company

“Material interest” is defined as meaning:

Beneficial ownership of, or the ability to control, directly or indirectly more than 5% of the ordinary share capital of the company; (...)

Where does it say in the IR35 legislation anything about material interest?

Could I not just give my mom 95% of the shares and ask her to give me the money on the side? Would that be illegal? I am not suggesting that I will do that.

[PeterSim]

Just because you don't like it, that doesn't make it illegal.

No I am being serious, I am sure there is something in competition law the prohibits making smaller companies being put at a disadvantage like this.

[SimonMac]

Seeing as I am starting to come to the realization that 99.9% of contractors are going to be deemed inside, because that is how the entire IR35 has been designed.

Are managed services providers also going to be seen as inside?

For example BT or another large managed service provider has a contract to upgrade a bit of software and they place an employee of theirs on site 35 hours a week for 12 months. That employee can be replaced by other staff within BT but he is not replaced for another employee over the 6 month period because that employee is a specialist in the software that that client requires and BT put no one on site for the days when the employee is not available. The employee also does not do any other work over the 12 month period for other clients.

If large managed services providers are exempt from IR35, then how is that reasonable or consistent?

If they are not deemed inside, then IR35 is going to seriously disrupt the competition in the managed service industry because every MSP started out as a limited company with one employee and grew from there.

Long and short of it, the employee of BT doesn't use an intermediary so they are unaffected.

If BY uses a contractor who does use an intermediary then yes they are

[PeterSim]

Staff of consultancies are not affected by IR35.

Because they're staff.

Definition of staff: permanent employees.

I assume you mean staff with the client? Even though they might be considered staff they are still usually paid through PAYE from their MSP. Would it matter where they are paid from to qualify as staff in "your" definition of staff.