feepayer responsibility in IR35 chain

[bloatymcbloat]

Still doesn't work - you need would need the entire project team as employers and being playing to the letter of that contract you would also not be able to send a share holder to any meetings on site - although it would allow me to insist on conference calls instead.

When I hit this next time round I'm tempted to have and use a separate "You are messing us around" price list with a 25% premium.

Yep thats what im worried about - that we as shareholders of the company shouldn't be doing any work based on the new amendment wording.

[bloatymcbloat]

Are you guys interchangeable (subbing for each other)? Do you have different roles you fulfill or are you in the same role and just deciding which of you fills it today?

The SOW just states we should provide 2 bodies and not us as named people. This is why its a fairly solid substitution clause and one thats been used by other suppliers several times who have rotated people off the client.

[eek]

Having permanent employees working for them.

Still doesn't work - you need would need the entire project team as employers and being playing to the letter of that contract you would also not be able to send a share holder to any meetings on site - although it would allow me to insist on conference calls instead.

When I hit this next time round I'm tempted to have and use a separate "You are messing us around" price list with a 25% premium.

[WordIsBond]

Are you guys interchangeable (subbing for each other)? Do you have different roles you fulfill or are you in the same role and just deciding which of you fills it today?

[cojak]

What defines us as being a real consultancy exactly vs playing at it? Some of the clients other suppliers are only 4 or 5 people for example.

Having permanent employees working for them.

[GhostofTarbera]

Thanks for the replies.

I don't think they are interested in any rewording which makes things tricky as most of the other suppliers that sign this have their employees on the client site so I guess they are in compliance to the terms that way.

Its just us currently that faces this issue as we are both on site and directors. However seems the client cant distinguish between this difference.

One way to solve this is to substitute ourselves and hire 2 new employees that are placed on the client site. This is our longer term goal but for now we are not sure how to play this.

At which point you may find out your client wants you and your IR35 escape plan buddy to do the work after all and reject your substitutes


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[bloatymcbloat]

Thanks for the replies.

I don't think they are interested in any rewording which makes things tricky as most of the other suppliers that sign this have their employees on the client site so I guess they are in compliance to the terms that way.

Its just us currently that faces this issue as we are both on site and directors. However seems the client cant distinguish between this difference.

One way to solve this is to substitute ourselves and hire 2 new employees that are placed on the client site. This is our longer term goal but for now we are not sure how to play this.

[bloatymcbloat]

Bigger consultancies than yours are having this restriction placed on them and they are handling it by being a proper business.

I guess the question is - are you a real consultancy or just a couple of contractors playing at it?

What defines us as being a real consultancy exactly vs playing at it? Some of the clients other suppliers are only 4 or 5 people for example.

[TheCyclingProgrammer]

Could you get them to re-word it to say something along the lines of: "the Consultancy agrees to operate PAYE on any income paid to its employees for any remuneration received for working on this project". If worded properly (IANAL), this wouldn't preclude you paying yourself dividends from company profits because it's the company that is receiving income for the project you and the other shareholder are simply receiving dividends from retained company profits - not as any direct consequence of working on this particular project.

[eek]

Has no one actually read the clause

The client is looking to renew but haven't made a status determination. Instead. they want us to sign an amendment to the contract which states "anyone on site should not be contracted through an intermediary and are required to pay PAYE and NI on income". This is a generic clause they intend to put on all their supplier contracts. They still however intend to pay us gross.

Scrub what I originally wrote as I missed the not bit before the and bit.

I wouldn't be accepting that simply because while I could accept the clause for intermediaries, I can't accept it for myself - the shareholders (albeit me) who invested to create the tools we use deserve to be paid.

Now I've actually rejected a similar clause with a clearer intermediaries bit but that was because the contract needed a lot of skilled labour and I couldn't get it under PAYE if I tried but this would impact some of the fixed cost projects we are looking at creating (which say replace 30 days of manual work with a program and 5 days of on site window dressing) and I wouldn't accept that.

[cojak]

Bigger consultancies than yours are having this restriction placed on them and they are handling it by being a proper business.

I guess the question is - are you a real consultancy or just a couple of contractors playing at it?

[GhostofTarbera]

feepayer responsibility in IR35 chain

Sorry missed the bit where client has determined you inside.

So you must go back to the start of original contract and pay PAYE from then also if you accept this and stay

[yorkshirespud]

So .. the end client is going to determine you both as outside, pay your company gross, and then insist that you are both paid PAYE only inside your own company?

Sounds like a totally confused understanding of IR35 with your client


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[bloatymcbloat]

Hi Folks

I own a Ltd company together with my business partner (we are 50\50 shareholder\director).

We currently have 1 client based on statement of work type contract for a fixed number of hours. Both of us are currently working on the client site as part of the contract. To date, we have been operating outside IR35 and have had the contract reviewed by qdos etc.

The client is looking to renew but haven't made a status determination. Instead. they want us to sign an amendment to the contract which states "anyone on site should not be contracted through an intermediary and are required to pay PAYE and NI on income". This is a generic clause they intend to put on all their supplier contracts. They still however intend to pay us gross.

I'm not really sure how this works given that I was understanding the new rules state it is the feepayers responsibility to deduct NI\PAYE - which in this case would be our client? We have tried to make this point a few times to them but it hasn't sunk in as they are dealing with multiple companies most of which are much bigger than ours and most hire employees so are covered.

We could technically start paying ourselves PAYE via our LTD company but we are not sure that is technically the right solution to this. Its very annoying for us as there is plenty of real evidence that our working practises are outside IR35 but we also want to comply with the amendment.

Any thoughts on how this should work?