Outsourcing advice

[eek]

Thank you, you seem well informed on the subject. Please forgive my ignorance. This may well be a stupid question...

If we use an outsourced development company to provide software development services on an ad-hoc basis (which we do today) would we have to assess their workers for IR35? I honestly don't think this is practical, we use numerous outsource providers for all kinds of IT systems and often pay them on a "time and materials" basis.

I genuinely don't know the answer to that question, I'm hoping it's a "no" but I suspect it could be an "it depends".

If the answer isn't a "no", then I have a second question which is if that outsourced company is overseas (Ukraine, India, Outer Mongolia), do we still have to assess their workers for IR35?

I suspect this boils down to whether they are delivering a finished "product" (working software) or a person? If so, I will propose we outsource this on a deliverables basis rather than time and materials.

The answer is that it depends unless the outsourced company is overseas and the person doing the work is also overseas...

[Paralytic]

I suspect this boils down to whether they are delivering a finished "product" (working software) or a person? If so, I will propose we outsource this on a deliverables basis rather than time and materials.

This (since you're not a small company). Good luck getting that agreed with HR due to the additional risk it adds on the client side.

[ComplianceLady]

Thank you, you seem well informed on the subject. Please forgive my ignorance. This may well be a stupid question...

If we use an outsourced development company to provide software development services on an ad-hoc basis (which we do today) would we have to assess their workers for IR35? I honestly don't think this is practical, we use numerous outsource providers for all kinds of IT systems and often pay them on a "time and materials" basis.

I genuinely don't know the answer to that question, I'm hoping it's a "no" but I suspect it could be an "it depends".

If the answer isn't a "no", then I have a second question which is if that outsourced company is overseas (Ukraine, India, Outer Mongolia), do we still have to assess their workers for IR35?

I suspect this boils down to whether they are delivering a finished "product" (working software) or a person? If so, I will propose we outsource this on a deliverables basis rather than time and materials.

Broadly if :

• the person delivering services is a shareholder in a limited co and
• the money paid to the limited co for the services is primarily for that persons service

then IR35 it should be considered.

So if the outsourcing company engages an individual with no limited co and the individual isn't a shareholder of the outsourcing then no.

HMRC recently published guidance on statement of works - the problem with this is if the outsourcing co still engages a UK PSC to deliver the work HMRC can still come after you if they don't think it's true outsourcing.


Trying to find a way around WILL put your company at greater risk (and potentially the contractor). It can be navigated fairly, properly and without risk. But it takes the client to engage properly with someone who understands it and listen to their advice.

[simes]

1. If we use an outsourced development company to provide software development services on an ad-hoc basis (which we do today) would we have to assess their workers for IR35? I honestly don't think this is practical, we use numerous outsource providers for all kinds of IT systems and often pay them on a "time and materials" basis.

I genuinely don't know the answer to that question, I'm hoping it's a "no" but I suspect it could be an "it depends".

If the answer isn't a "no", then I have a second question which is …

2. if that outsourced company is overseas (Ukraine, India, Outer Mongolia), do we still have to assess their workers for IR35?

I suspect this boils down to whether they are delivering a finished "product" (working software) or a person? If so, I will propose we outsource this on a deliverables basis rather than time and materials.

1. This is what has been best exemplified by the banks recently whereby they first stated a blanket non-use of PSC LtdCos and then, having thought a bit further, they then became first by telling all their Consultancies that they too, could not use PSC LtdCos as part of any delivery pertaining to the banks' projects.

2. This one has only recently been clarified as it was kinda close to my home. And it comes down to whether the overseas company has any onshore presence and any use of that.

My case: I work for an NL company. I am paid from NL. But I work mostly in the UK and sometime head into the London office. I thought I was exempt because of the first two sentences. Apparently not.

It sounds like your fella will need to be paid from overseas and also work from overseas. Not what you wanted to hear, am sure.

[eek]

1. This is what has been best exemplified by the banks recently whereby they first stated a blanket non-use of PSC LtdCos and then, having thought a bit further, they then became first by telling all their Consultancies that they too, could not use PSC LtdCos as part of any delivery pertaining to the banks' projects.

2. This one has only recently been clarified as it was kinda close to my home. And it comes down to whether the overseas company has any onshore presence and any use of that.

My case: I work for an NL company. I am paid from NL. But I work mostly in the UK and sometime head into the London office. I thought I was exempt because of the first two sentences. Apparently not.

It sounds like your fella will need to be paid from overseas and also work from overseas. Not what you wanted to hear, am sure.

No as I stated in my first post on this thread - the only fix is to get the blanket ban removed as at the moment there are two immovable objects and the contractor has more options (including just taking a holiday) than the end client has...

[simes]

No as I stated in my first post on this thread - the only fix is to get the blanket ban removed as at the moment there are two immovable objects and the contractor has more options (including just taking a holiday) than the end client has...

Oh I completely agree, but while he has a live and, if not necessarily 'kicking', HR department cocking things up, all he can do is to self educate by asking questions, and us to answer as helpfully as the HMRC mess allows.

Otherwise, as below. If in fact any of it is even remotely possible - at this juncture.

Remove HR from any equation
Find other internal department for equation - Procurement?
Lift blanket ban
Do Not use any of the big four for advice
Use a Qdos type organisation for advice and insurance
Hire PSC Contractors

[economicpygmy]

You're not my contractor are you??

Nope
Have you spoken to corporate/HR to see if they agree a contract with a clear statement of work and milestone payments is sufficiently outside? If they dont agree you may as well give up.

Use a Qdos type organisation for advice and insurance

Really good point ^^ Last time I spoke to QDOS they spoke of insurance for the client (i.e. your company). Get them to check the contract (and working arrangements), take out the insurance and tell the **** in HR to chill