Reply to: Is anyone using a contrived agency contract?

[Zero Liability]

Agreed, lack of D&C is a critically important factor that is both straightforward to understand and to evidence. Among other things, it separates between low-skilled workers under contrived employment arrangements vs. high-skilled workers that provide discrete, technical, services that are not available in-house. Lack of D&C is where the focus needs to be IMHO.

Surely this would then only apply to a tiny minority of contractors? I mean for popular roles like a BA, PM, accountant or trainer, which of these can't be performed in-house? Alright, perhaps you want them for a short term project, but how is that different to engaging temp staff? Lack of MoO and ROS, on the other hand, do refer to things commonly not part and parcel of an employment contract, just as much as D&C (and again, you get permie roles with significant levels of autonomy and risk taking too.) It's just that the ROS provides an uphill battle for HMRC, because if they cannot prove that its a sham and cannot straightforwardly show the client would always reject it, how are they to dispute it? I don't see why any ground should be ceded to them in this respect, however. If they want to make this all about protecting "exploited" workers with respect to the self-employed individuals taken on by these agencies, fair enough, but why should RoS be questioned for the contracting market, where it is much harder to argue any "vulnerable" individuals are being "protected"?

If they just want more pelf, harmonise NI with personal tax or target the end clients/intermediaries, rather than trying to invent contorted, arbitrary standards for differentiating two forms of providing your business. Not that I am unhappy with the present state of affairs relative to that scenario.

Also, couldn't these agencies rely on both lack of MoO and the presence of a ROS? Lack of MoO shouldn't be any harder to write into a contract, or evidence.

So I am in agreement with Malvolio on this.

[Contreras]

Two sics for the price of one in the consultation doc ...

"A personal service company (PSC) is a small limited company thorough [sic] which a owner/director provides there [sic] own personal services."

Indeed it really does say that.

https://www.gov.uk/government/upload...employment.pdf

[jamesbrown]

Interestingly there is a glossary in the onshore intermediaries consultation document which describes a PSC as "a small limited company through which a owner/director provides there [sic] own personal services"

Two sics for the price of one in the consultation doc ...

"A personal service company (PSC) is a small limited company thorough [sic] which a owner/director provides there [sic] own personal services."

[jamesbrown]

It’s a huge step in the right direction – direction and control needs much more emphasis than right of substitution as that, in my opinion at least, is a far bigger pointer towards disguised employment or not.

Now, if only HMRC would target all parties to the contract for IR35 (recouping lost Employer’s NI from who they’ve just deemed to be the employee, has to be up there with one of the biggest contradictions in UK tax law) rather than just the contractor that would be great.

Agreed, lack of D&C is a critically important factor that is both straightforward to understand and to evidence. Among other things, it separates between low-skilled workers under contrived employment arrangements vs. high-skilled workers that provide discrete, technical, services that are not available in-house. Lack of D&C is where the focus needs to be IMHO.

[LisaContractorUmbrella]

I wonder I they've noticed that among many others, Philip Green and Richard Branson's companies only have 2-3 employees including themselves...

I think everything that they notice in the course of a year could be recorded on a very small post it note

[malvolio]

Interestingly there is a glossary in the onshore intermediaries consultation document which describes a PSC as "a small limited company through which a owner/director provides there [sic] own personal services"

I wonder I they've noticed that among many others, Philip Green and Richard Branson's companies only have 2-3 employees including themselves...

[LisaContractorUmbrella]

Interestingly there is a glossary in the onshore intermediaries consultation document which describes a PSC as "a small limited company through which a owner/director provides there [sic] own personal services"

[LisaContractorUmbrella]

Just to reiterate, the proposed legislation changes only change the agency regulations and do not change anything as far as IR35 and RoS go.

I don't recall saying otherwise.

[TheCyclingProgrammer]

This is the point I have been arguing. If there is a standard clause that isnt reflected in the higher contract then that puts the agent at risk. As such, I can see agencies refusing to put the clause in the lower contract unless it is reflected in the higher contract. This would make being outside IR35 much harder.

Only harder if you were fully reliant on RoS to prove your IR35 status though, surely?

[TheCyclingProgrammer]

But what's proposed is an amendment to Statute

Just to reiterate, the proposed legislation changes only change the agency regulations and do not change anything as far as IR35 and RoS go.

[GB9]

From what I understand it's not the case that Right Of Substitution is now not important, what they're doing is clamping down on contrived ROS, and when they say it won't affect contractors, they mean real contractors, but what about bums on seats contractors with their ROS standard clause they use simply to pass the IR35 reviews. I wonder if the border hasn't been moved slightly,

This is the point I have been arguing. If there is a standard clause that isnt reflected in the higher contract then that puts the agent at risk. As such, I can see agencies refusing to put the clause in the lower contract unless it is reflected in the higher contract. This would make being outside IR35 much harder.

[BlasterBates]

From what I understand it's not the case that Right Of Substitution is now not important, what they're doing is clamping down on contrived ROS, and when they say it won't affect contractors, they mean real contractors, but what about bums on seats contractors with their ROS standard clause they use simply to pass the IR35 reviews. I wonder if the border hasn't been moved slightly,

[LisaContractorUmbrella]

RoS is important because it is embedded in case law as an indicator to non-employment from the original Ready Mix Concrete case that underpins the whole debate about who is and isn't an employee. It's not going to go away since any judgement that attempts to set it aside can be appealed.


And it's the "right" to do it, not the practicality of it, that is the key element. Employees can't send subbies.

But what's proposed is an amendment to Statute

[malvolio]

RoS is important because it is embedded in case law as an indicator to non-employment from the original Ready Mix Concrete case that underpins the whole debate about who is and isn't an employee. It's not going to go away since any judgement that attempts to set it aside can be appealed.


And it's the "right" to do it, not the practicality of it, that is the key element. Employees can't send subbies.

[LisaContractorUmbrella]

I hope Lisa's company doesn't advertise for business using this.

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