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IR35 Risk in switching between agency and client?

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    IR35 Risk in switching between agency and client?

    I’m currently in a situation where I’m contracted to my client via a recruitment agency outside of IR35. Now that this has happened for two years, the client wants to contract me directly rather than going via the agency. The agency have said that this is an IR35 risk as I would be “moving closer to the client”. Can anyone confirm if this is actually true?

    Many thanks in advance.

    I’ve Googled it to death but I can’t find any answers to this specific situation.

    #2
    It's a load of nonsense and they obviously have a vested interest in that particular porky.

    That said, you should continue to remain vigilant about the IR35 status of this contract, i.e., that you're not becoming part and parcel or being controlled etc. Remember that the IR35 status of a contract can change when the working practices change. Are you dealing with a small client (old rules) or did you get an SDS from the end client via the agent after April 2021 indicating that the contract is outside IR35?

    Anyway, be aware of this sticky too:

    https://forums.contractoruk.com/acco...contracts.html

    Comment


      #3
      JamesBrown is correct, the actual statement is poppycock BUT there are some IR35 risks here. It's up to the client and the agent to fight about your situation. It sounds like the agent is feeding you potentially false information in an effort to get you onside so you can also say no to the client. The contractual situation is theirs to sort out, not yours.

      Firstly I assume you've had your SDS and the client has said you are outside?

      Secondly, what is your status now.. like really, no BS. Two years at a client starts to bring in part and parcel issues. The fact the client wants you on board could also be a factor in this. He want's you as a person, not a company to provide a service. It's possible its a massive two year project but it's also possible you've taken on multiple pieces of work and the client wants to carry this on. This is deffo part and parcel and/or Direction and control.

      So the move itself isn't an IR35 issue but two years and the client wanting you direct could be indicative of failings and lax working conditions which means your IR35 status is already questionable.

      Also, I'd say if you've been a client two years you should know about as much about IR35 as it is possible to know to protect yourself on a long gig. If you don't know enough then learn quick so you can start to stop IR35 creep.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Thanks for that. The client has a turnover of over £30m so they are not classed as small. They have never issued any SDS, even though they were requested by the agency. I keep checking contracts with QDos to make sure they are outside of IR35. The reality is that the client has no control of me. I can work from where I like (although I go onsite when necessary - e.g. presentations etc). I am also controlling how the programme works without any supervision whatsoever.

        Comment


          #5
          Originally posted by northernladuk View Post
          JamesBrown is correct, the actual statement is poppycock BUT there are some IR35 risks here. It's up to the client and the agent to fight about your situation. It sounds like the agent is feeding you potentially false information in an effort to get you onside so you can also say no to the client. The contractual situation is theirs to sort out, not yours.

          Firstly I assume you've had your SDS and the client has said you are outside?

          Secondly, what is your status now.. like really, no BS. Two years at a client starts to bring in part and parcel issues. The fact the client wants you on board could also be a factor in this. He want's you as a person, not a company to provide a service. It's possible its a massive two year project but it's also possible you've taken on multiple pieces of work and the client wants to carry this on. This is deffo part and parcel and/or Direction and control.

          So the move itself isn't an IR35 issue but two years and the client wanting you direct could be indicative of failings and lax working conditions which means your IR35 status is already questionable.

          Also, I'd say if you've been a client two years you should know about as much about IR35 as it is possible to know to protect yourself on a long gig. If you don't know enough then learn quick so you can start to stop IR35 creep.
          Thanks for this. Just to clarify it’s taken almost 2 years for the client to actually sign contracts with the ERP vendor (nothing has taken this long in my life to get to this stage). It’s estimated that it will be another 2 years to get to completion of the implementation of the selected software. I have not taken on any extra scope (and will not be).
          I am genuinely outside of IR35 not just from a contractual perspective but in reality as everything is under my control.

          Comment


            #6
            Originally posted by SOSITCOJim View Post
            Thanks for that. The client has a turnover of over £30m so they are not classed as small. They have never issued any SDS, even though they were requested by the agency. I keep checking contracts with QDos to make sure they are outside of IR35. The reality is that the client has no control of me. I can work from where I like (although I go onsite when necessary - e.g. presentations etc). I am also controlling how the programme works without any supervision whatsoever.
            Well you've got a world of potential trouble. They have to provide one. It's written here in the legislation https://www.gov.uk/hmrc-internal-man...anual/esm10012

            The worry is the client haven't looked in to it or just ignored it. Once they wake up and realise they have to do it and also realise they are on the hook if you are found to be inside they could push you inside to avoid this risk, as many clients and most of the banking sector did. If that's the case then oh boy are you screwed.

            You really need to get that bit sorted and pronto IMO.

            Most people roll out the working from home when talking about IR35 and it's irrelevant. Perms can work from where ever they want as well. It's not a valid differentiator. When people do go straight for that and think it's an IR35 flag I start worrying about what they really know and what their real situation is. To be fair you do mention a control point which could be good but the sentence isn't clear enough for me. I don't believe you are controlling how the programme works, the client must have governance you work to which means they are controlling it but that could just be just the way you worded it. Anyhow, get that SDS.

            I am genuinely outside of IR35 not just from a contractual perspective but in reality as everything is under my control.
            Said every outside contractor ever.

            That said, if you are in control of everything and it's taken two years to sign the contract then shouldn't you be considering sacking yourself?
            Last edited by northernladuk; 23 August 2022, 15:34.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

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