Reply to: End Client and Consultancy, who should be making the determinations?

[Paralytic]

I didn't think it had any legs until it kicks in in April so doesn't matter what you call it right now, assessment or SDS, but either way it's all the information you need to know about your engagement after April?

I think there are subtle differences

- As above, you can't challenge the assessment (as you are legally allowed to do post-April - not that it will make any difference)
- As an assessment is not an SDS so I can't see it holding as much power in the hands of IR35. eg, Whilst clients have to take reasonable care to create an SDS, is there such a stipulation for an assessment?

Interestingly, the gov.uk page states:

A status determination statement issued before 6 April 2020 is valid under the new rules, if it contains the reasons for the conclusion reached. If the working practices of the engagement change or you negotiate a new contract with the worker, you need to make sure that you re-check the rules to see if they still apply.

That sounds a bit retrospective to me. Its all of a bit of a moot point however - I'd not be sticking around at a client who gave an inside assessment, whether they called it an SDS or not.

[IRMe]

Does something someone might or might not call an SDS even have any legal bearing before April?

From the draft ESM10013

Status determinations made prior to 6 April 2020 can be a valid SDS for engagements carrying on after 6 April 2020 providing they meet the legislative requirements. The SDS must include the reason for reaching the conclusion and have been passed to the worker and any third party the client contracts with.

The requirements being:

• state in the SDS whether or not the worker would be an employee or office holder, or is an office holder, for tax and NICs purposes if they were directly engaged by the client.
• provide their reasons for coming to that conclusion.
• have taken reasonable care in coming to their conclusion

[northernladuk]

Does something someone might or might not call an SDS even have any legal bearing before April?

I didn't think it had any legs until it kicks in in April so doesn't matter what you call it right now, assessment or SDS, but either way it's all the information you need to know about your engagement after April?

[JohntheBike]

Does something someone might or might not call an SDS even have any legal bearing before April?

I guess you are correct. An "assessment" can't be called an SDS prior to April, but it is the same in reality. But it's a clever ploy, because the organisation issuing the "assessment" will not be obliged to justify its conclusions, as the mechanism for that will only apply in April., when an SDS becomes a requirement.

[Paralytic]

First and foremost, my services are supplied to the end client exclusively from the offices of MyCo. I do not attend at either the offices of the consultancy nor the client. However, there is clearly an issue with how some individuals perform their duties. I can't say I understand the finer legal points, but in effect the consultancy is saying that some assessments will be made by QDOS for the consultancy and some for the client. But if you read my post about umbrellas, the consultancy is saying that the "assessments" will not constitute an SDS. I really can't see how they can claim that. But I guess it's a ploy to avoid any employment claims for anyone assessed as inside IR35.

Does something someone might or might not call an SDS even have any legal bearing before April?

[JohntheBike]

It's what you deliver, not where.

there is no SDC, but then QDOS might have a different perspective from Abbey Tax, who agreed there is no SDC.

[northernladuk]

It's what you deliver, not where.

[JohntheBike]

No. It may still apply if you are a bum on seat at the consultancy working on a work package to sell the client. In this case the client is a consumer of services of your consultancy, not of yours.. The engagement with the consultancy to deliver bum seat day by day work from you is an ir35 problem.

If you are engaged in a way you deliver a workpackage to the consultancy as company work could indicate ir35 doesn't apply.

That make sense?

When you say services to the end client I think that might mean personal services if that makes it any clearer.

First and foremost, my services are supplied to the end client exclusively from the offices of MyCo. I do not attend at either the offices of the consultancy nor the client. However, there is clearly an issue with how some individuals perform their duties. I can't say I understand the finer legal points, but in effect the consultancy is saying that some assessments will be made by QDOS for the consultancy and some for the client. But if you read my post about umbrellas, the consultancy is saying that the "assessments" will not constitute an SDS. I really can't see how they can claim that. But I guess it's a ploy to avoid any employment claims for anyone assessed as inside IR35.

[simes]

I think the confusion is this. The end client always issues the SDS.

But who is the end client?

Ordinarily, this is obvious. But the question over what constitutes an outsourced service makes it less obvious in some cases.

Yup, completely agree.

The HMRC have made a rod for their own back in this regard, especially since by the sounds of it, there will be a number of small niche oriented consultancies that will be going under.

But in light of the banks' action in aiming for zero risk, I fear this will be the citizens' taking of the rule as opposed to awaiting any response from HMRC to say,

'Ah, erm, well, in eh this case, we might make an exception to the previously excepted rule and offer something that we won't later change our minds about and then 25 years down the line, Investigate.'

[jamesbrown]

I believe so too.

At least, this is the structure the banks (at present) are taking.

No PSCs, no matter how many intermediaries or consultancies sitting in the middle... And, I can imagine the way things have been going, this will be adopted by wider swathes. Safe than sorry being the thrust etc.

I think the confusion is this. The end client always issues the SDS.

But who is the end client?

Ordinarily, this is obvious. But the question over what constitutes an outsourced service makes it less obvious in some cases.

[simes]

It should be the end client whatever the chain as far as I understand. However, it would seem that it's not that straightforward legally.

I believe so too.

At least, this is the structure the banks (at present) are taking.

No PSCs, no matter how many intermediaries or consultancies sitting in the middle... And, I can imagine the way things have been going, this will be adopted by wider swathes. Safe than sorry being the thrust etc.

[northernladuk]

perhaps this is the subtlety that's causing the issue with my consultancy. Could it be that the "fully managed work package" is intimating that IR35 doesn't apply at all? Remember that IR35 is related to the services provided to the end client.

No. It may still apply if you are a bum on seat at the consultancy working on a work package to sell the client. In this case the client is a consumer of services of your consultancy, not of yours.. The engagement with the consultancy to deliver bum seat day by day work from you is an ir35 problem.

If you are engaged in a way you deliver a workpackage to the consultancy as company work could indicate ir35 doesn't apply.

That make sense?

When you say services to the end client I think that might mean personal services if that makes it any clearer.

[JohntheBike]

It depends on what the delivery method is through to end client. If they are getting a fully managed work package the it's not them. If they want people in site to work with them to achieve their requirements its likely to be then.

Who in that chain do you do the work for? For the consultancy to package and sell to the client in which cause I'd say consultancy.. . or will the agency be selling your services as a body on site in which case the client could treat you like employee so it would be the client.

If they are getting a fully managed work package the it's not them.

perhaps this is the subtlety that's causing the issue with my consultancy. Could it be that the "fully managed work package" is intimating that IR35 doesn't apply at all? Remember that IR35 is related to the services provided to the end client.

[northernladuk]

It depends on what the delivery method is through to end client. If they are getting a fully managed work package the it's not them. If they want people in site to work with them to achieve their requirements its likely to be then.

Who in that chain do you do the work for? For the consultancy to package and sell to the client in which cause I'd say consultancy.. . or will the agency be selling your services as a body on site in which case the client could treat you like employee so it would be the client.

[jamesbrown]

Depends whether it's an outsourced service being delivered by the consultancy or the consultancy is acting as a bodyshop. If the former, the SDS will be produced by the consultancy, otherwise the end client.

There's an ESM on what constitutes an outsourced service, but it's currently yanked:

ESM10010 - Employment Status Manual - HMRC internal manual - GOV.UK