Small company only doing Inside contracts

[edison]

To be fair from what I've seen from interviews, heard about from other contractors and what I've seen on here I'm pretty much of the opinion 'most' start up gigs are inside anyway. Due to the all hands on deck approach D&C is a real problem and they rarely have enough people to leave you to just deliver to your SoW. They also don't want a company, they want you so RoS is right out as well.

Might be different for a 5 year old one but I'd say most are inside if you have a good look at the work and environment.

Then there is the issue they are too small to dick about with IR35 so inside it is.

I agree with this. I worked for a scale up earlier this year which had about 50 salaried staff and another 80 temp staff (not contractors.) I was brought in to do some CIO advisory work and I had a SOW which I wrote as the agent put together something far too basic. I was assessed as outside IR35 but to be honest, after a few months there, the client still didn't really understand IR35...

[rocktronAMP]

I thought the distinction/question was that a small company isn't allowed to make the determination, while a large company must do so. Is this not correct - is it a responsibility a small company can opt in/out of?

This is the small company business exemption.

If it were me, I would explain this part of the Off Payroll Worker to them. I bet you already have. Ergo I would walk away from them if they refuse Outside IR35, because you don't need SDS. You might however need some formal declaration of balance sheet, turnover and employee account should the revenue come calling in 2024, 2025, ...!

So as others have said, the ultimate client (if they are not lying about another business owning them) are risk adverse.
Perahaps they are being cagey with the truth, suspicion points to a new merger and acquisition in 2023! They will be bought or they are thinking of buying....

[Lance]

maybe they want you offer them MOO, have no ROS and be under direct control...

maybe. Just guessing really based on the criteria of what inside/outside is determined by. They could well have made that decision and that's the end of it.

Be clear. though.... if you persuade them that you will make the determination, and are investigated, and they say "well it was always inside but Ensignia wanted to dodge the rules", then you are f***ed.

[d000hg]

That is correct, but a company of any size can impose contractual terms. For example, none of the banks faff with IR35, they all require umbrellas.

Thanks. Certainly if your client insist you are Inside then it would be a brave PSC director who decided to do their accounts on the determination it was Outside

[jamesbrown]

I thought the distinction/question was that a small company isn't allowed to make the determination, while a large company must do so. Is this not correct - is it a responsibility a small company can opt in/out of?

That is correct, but a company of any size can impose contractual terms. For example, none of the banks faff with IR35, they all require umbrellas.

[d000hg]

Client is risk adverse - just accept it

I thought the distinction/question was that a small company isn't allowed to make the determination, while a large company must do so. Is this not correct - is it a responsibility a small company can opt in/out of?

[jamesbrown]

I would be willing to take 10% a day less if the determination lies with me.

I don't see what you'd gain because, if the client thinks the work is inside, it's effectively inside (there would be no realistic prospect of success in defending it), so you'd effectively lose 10% of your rate and still suffer full PAYE, albeit with the 5% for expenses under Chapter 8 (and some other minor differences like the Apprenticeship Levy). The only sane option for all concerned is to stick it through an umbrella and salary sacrifice what you can into your pension.

[ensignia]

Thanks all. Bloody multi quote doesn't work on here so will respond individually.

jamesbrown I think this is probably due to the company not knowing that the off-payroll rules don't apply all the time rather than a conscious decision on their part. I will query it again with them directly as I feel it's something worth pursuing. For them there is very little difference whether I get paid via an umbrella co or the agency to my Ltd. I would be willing to take 10% a day less if the determination lies with me.

northernladuk Although a fair point, I'm sure it'll be no different to most contracts whether they're Inside or Outside. I know we all like to act like we're unique specialists providing high level skilled work, but fact is real contracting doesn't work like that. We are just resources at the end of the day.

sreed Fair enough, and my reply to NLUK above sort of covers it off. I've worked with 11 clients now since March 2020 (8/11 were Outside) yet the working practices between Inside & Outside were almost indistinguishable.

Oh, and eek , it's risk averse.

[sreed]

I have recent experience of contracts with small fintechs over the past few years. 4 of the 5 were inside IR35 and there was no other option on the table. But to be fair, the roles wouldn't have met the criteria to be outside as to all intents and purposes you were a bum on a seat and fulfilled much the same functions as an employee would. And I think it's fair to say that the other few contractors on board were all in the same boat.

The only one that was outside was a role where the contract billing days varied week on week, there was no expectation of being available during business hours and I was also doing another similar contract at the same time.

[northernladuk]

I spoke to the agent who said they only operate Inside and didn't understand what I was talking about or how I knew the companies finances.

To be fair from what I've seen from interviews, heard about from other contractors and what I've seen on here I'm pretty much of the opinion 'most' start up gigs are inside anyway. Due toi the all hands on deck approach D&C is a real problem and they rarely have enough people to leave you to just deliver to your SoW. They also don't want a company, they want you so RoS is right out as well.

Might be different for a 5 year old one but I'd say most are inside if you have a good look at the work and environment.

Then there is the issue they are too small to dick about with IR35 so inside it is.

[jamesbrown]

Can they force their contingent workers to accept Inside roles, when the determination should lie with the worker?

The two things are largely orthogonal. One is the contract. The other is your responsibilities to assess IR35 under Chapter 8. The only connection between the two is that, given the contract, you likely won't need to assess IR35 because they will mandate an umbrella. Of course, this is perfectly fine and it's a commercial decision on their part. I highly doubt they will issue a contract that says you will be paid gross and must then declare it inside IR35, they will simply require that you use an umbrella. Since this is outwith Chapter 10, they have no role as a Fee Payer and hence cannot make upfront deductions. But if they were stupid enough to merely write it in the contract, then obviously, if you decided differently, you'd be in breach of contract, for one, and would subsequently lose any tribunal, given the client's position.

[eek]

I've been offered a role with a 5 year old start-up who meet the criteria of a small company - it's even mentioned in their accounts.

This is the guidance:

A business will be small if it satisfies two or more of the following requirements:

• It has an annual turnover not exceeding £10.2m
• It has a balance sheet total not more than £5.1m
• It had an average of no more than 50 employees for the company’s financial year.

However, they have a few contractors who are all operating Inside (probably permietractors if they didn't do any due diligence on the client), and the role has been offered as Inside.

I spoke to the agent who said they only operate Inside and didn't understand what I was talking about or how I knew the companies finances.

Can they force their contingent workers to accept Inside roles, when the determination should lie with the worker?

Work is interesting, rate is good but I'm not on board with this aspect of it.

Client is risk adverse - just accept it

[ensignia]

I've been offered a role with a 5 year old start-up who meet the criteria of a small company - it's even mentioned in their accounts.

This is the guidance:

A business will be small if it satisfies two or more of the following requirements:

• It has an annual turnover not exceeding £10.2m
• It has a balance sheet total not more than £5.1m
• It had an average of no more than 50 employees for the company’s financial year.

However, they have a few contractors who are all operating Inside (probably permietractors if they didn't do any due diligence on the client), and the role has been offered as Inside.

I spoke to the agent who said they only operate Inside and didn't understand what I was talking about or how I knew the companies finances.

Can they force their contingent workers to accept Inside roles, when the determination should lie with the worker?

Work is interesting, rate is good but I'm not on board with this aspect of it.