Reply to: Ir35 2020

[CryingSheep]

If they only offer it for those that are easily assessed as outside what value is there in it?

The client can't be bothered (financially and timewise) to access individual cases, so client will deemed everyone inside without looking case to case!

The only value is to offer a solution around this...

Of course this are initial conversations, maybe client change its mind once he sees the bill the agency will present for this solution or the alternative of most contractors walk away!

[ComplianceLady]

The agency is a big, well known and well established one. Will only offer the solution for projects where contractors are 'easily' accessed as outside.

End client is a massive company and main reason given for blank inside assessment is the cost involved in doing it case to case...

If they only offer it for those that are easily assessed as outside what value is there in it?

[dsc]

Cheers James, I'm just curious what happens if my client classes everyone inside and all the supplied consultants via the supplier are deemed outside by their own clients. Then I guess it all boils down to why the "inside" decision was in the first place...

The above is purely theoretical and my own curiosity, I'm direct so if I'm classed inside I'm out (even though I've been classed as outside by Qdos after assessing my own contract and wp).

[jamesbrown]

Is supplying a software engineer classed as labour or service? both the supplied contractor and permie work on-site, can't work remotely due to all the hardware being on site and only claim for the hours done on-site. Of course it's a non-issue for the permie, I'm just curious how the contractor gets treated and whether he should be worried or not.

As for the supplier, they are a proper company, it's not a scam agency, they do their own work, but also found this niche where they can supply people with a specific product skillset to my client who can't be bothered hiring permies with this skillset (even though they rely on this skillset heavily).

It is clearly a labour supply. A software engineer is labour. If a person is supplied, it is labour. Software is not labour. The grey area is when a contract includes both, such as a software supply whose installation requires labour, but I think that would count as a service, because the contract would be written that way. Either way, someone is going to make the assessment and issue an SDS. It isn't as though this classification absolves the end client from its responsibility, it just clarifies who that end client is. So you can overthink this. If you're inside, you're inside, you're inside. If you're outside, you're outside, you're outside. It's based on WP and you'll get the SDS from whomever knows them best (to simplify).

[CryingSheep]

The agency carries all the liability ONLY if it's real. If it's a sham the Agency disappears and the client is still on the hook.

For it to be real the Agency has to invest in proper project management / service delivery whilst being sure to engage those individuals on an outside bassi - not an easy thing to do.

If the work can be delivered on an outside basis just deliver it to the end client that way and the agency pays for an insurance backed determination and manages the process for them, plus they indemnify the client if it goes wrong. Even in the event the determination is wrong and HMRC come calling AND the agency diappears, the insurance product stays plus the end client have evidence of reasonable care.

It's not so much what's wrong with SOW it's what's right with it. If it's suitable for SOW via Limited Co's then there are MUCH better ways to do it.

The agency is a big, well known and well established one. Will only offer the solution for projects where contractors are 'easily' accessed as outside.

End client is a massive company and main reason given for blank inside assessment is the cost involved in doing it case to case...

[dsc]

If it's a supply of labour, then the consumer will be the "end client" and will do the assessment and the supplier will be the "fee payer". If it's a service supply, then the supplier will do the assessment, and the supplier is both the "end client" and "fee payer".

There is necessarily some ambiguity about what constitutes a supply of labour vs. a service, but it will be clear in most cases. For real employees (not ones deemed for tax purposes), this is irrelevant, of course, because IR35 is irrelevant.

Is supplying a software engineer classed as labour or service? both the supplied contractor and permie work on-site, can't work remotely due to all the hardware being on site and only claim for the hours done on-site. Of course it's a non-issue for the permie, I'm just curious how the contractor gets treated and whether he should be worried or not.

As for the supplier, they are a proper company, it's not a scam agency, they do their own work, but also found this niche where they can supply people with a specific product skillset to my client who can't be bothered hiring permies with this skillset (even though they rely on this skillset heavily).

[ComplianceLady]

I heard of a similar solution:

Agency X becomes the service provider for client Y. Contractors ltd that were providing their services to client Y are now providing to Agency X.

Agency X has now the responsibility to make the IR35 assessment (and liability) and deems everyone outside, so everything stays the same for those contractors and their ltds.

It sounds to easy way around of this complex issue, what are the flaws of such approach?

The agency carries all the liability ONLY if it's real. If it's a sham the Agency disappears and the client is still on the hook.

For it to be real the Agency has to invest in proper project management / service delivery whilst being sure to engage those individuals on an outside bassi - not an easy thing to do.

If the work can be delivered on an outside basis just deliver it to the end client that way and the agency pays for an insurance backed determination and manages the process for them, plus they indemnify the client if it goes wrong. Even in the event the determination is wrong and HMRC come calling AND the agency diappears, the insurance product stays plus the end client have evidence of reasonable care.

It's not so much what's wrong with SOW it's what's right with it. If it's suitable for SOW via Limited Co's then there are MUCH better ways to do it.

[CryingSheep]

As it turns out they are getting an outside company to do an assessment of their IR35 status, which means, at least theoretically, a more individual approach. They will most likely go through contracts etc. and deem most people in as the original contract I got was full of IR35 red flags (which they only found out about from myself after it was reviewed by Qdos - this then became their new "master" contract as far as I'm aware).

Any ideas on how this works if work is subcontracted to another company? There's two chaps working on the same floor, they are "loaners" from company X, one is a permie over there and the other is a contractor, I reckon he gets his own status assessed by company X as this is his direct client and the whole "loaning" situation doesn't really change things much? the guy gets moved about from project to project, "loaned" to different clients of company X, so it smells of "being used like a resource".

Thanks for the link, I think at this stage HMRC just ignores anyone, just ploughing through to get as much money as possible. Some of the recent cases mentioned by Qdos show how big of a bully they are, scaring the living s*it out of legit outside-IR35 contractors, only to back out at a random stage if so they decide.

I heard of a similar solution:

Agency X becomes the service provider for client Y. Contractors ltd that were providing their services to client Y are now providing to Agency X.

Agency X has now the responsibility to make the IR35 assessment (and liability) and deems everyone outside, so everything stays the same for those contractors and their ltds.

It sounds to easy way around of this complex issue, what are the flaws of such approach?

[jamesbrown]

As it turns out they are getting an outside company to do an assessment of their IR35 status, which means, at least theoretically, a more individual approach. They will most likely go through contracts etc. and deem most people in as the original contract I got was full of IR35 red flags (which they only found out about from myself after it was reviewed by Qdos - this then became their new "master" contract as far as I'm aware).

Any ideas on how this works if work is subcontracted to another company? There's two chaps working on the same floor, they are "loaners" from company X, one is a permie over there and the other is a contractor, I reckon he gets his own status assessed by company X as this is his direct client and the whole "loaning" situation doesn't really change things much? the guy gets moved about from project to project, "loaned" to different clients of company X, so it smells of "being used like a resource".

Thanks for the link, I think at this stage HMRC just ignores anyone, just ploughing through to get as much money as possible. Some of the recent cases mentioned by Qdos show how big of a bully they are, scaring the living s*it out of legit outside-IR35 contractors, only to back out at a random stage if so they decide.

If it's a supply of labour, then the consumer will be the "end client" and will do the assessment and the supplier will be the "fee payer". If it's a service supply, then the supplier will do the assessment, and the supplier is both the "end client" and "fee payer".

There is necessarily some ambiguity about what constitutes a supply of labour vs. a service, but it will be clear in most cases. For real employees (not ones deemed for tax purposes), this is irrelevant, of course, because IR35 is irrelevant.

[dsc]

As it turns out they are getting an outside company to do an assessment of their IR35 status, which means, at least theoretically, a more individual approach. They will most likely go through contracts etc. and deem most people in as the original contract I got was full of IR35 red flags (which they only found out about from myself after it was reviewed by Qdos - this then became their new "master" contract as far as I'm aware).

Any ideas on how this works if work is subcontracted to another company? There's two chaps working on the same floor, they are "loaners" from company X, one is a permie over there and the other is a contractor, I reckon he gets his own status assessed by company X as this is his direct client and the whole "loaning" situation doesn't really change things much? the guy gets moved about from project to project, "loaned" to different clients of company X, so it smells of "being used like a resource".

Thanks for the link, I think at this stage HMRC just ignores anyone, just ploughing through to get as much money as possible. Some of the recent cases mentioned by Qdos show how big of a bully they are, scaring the living s*it out of legit outside-IR35 contractors, only to back out at a random stage if so they decide.

[northernladuk]

They've decided that in their wisdom that if you want to challenge your status your first port of call is to raise it with your client. So by the letter there is something you can do. In practice it's probably bugger all as you state.

I think everyone that was following the consultation that saw that and rolled their eyes.

Have a read of this.
Off-Payroll draft legislation published: Government dismisses consultation concerns

[dsc]

Just a quick question from myself after reading the above and having a conversation with my client today. If you are deemed to be inside by your client, there's bugger all you can do right? I mean apart from saying bye.

I'm near the end of my contract (mid Nov) and they are offering an extension, most likely 3 months which would take me to mid Feb, kind of perfect, as I can get paid before 6/4/19 and bugger off if need be. What shocks me is the sheer lack of understanding what happens if they carry on what their plan is ie. Deem everyone inside. I said that most contractors will walk to which they replied with "why?" and that it would be a huge risk to the business if it happened (at least that's right). No tulip sherlock..

[Snooky]

And they have missed the boat

Try completing with sapient or wipro where the entire scrum teams are from outside the EU, 70% Indian but now Turkey / china / Russian who are prepared to work 12 hours a day, 7 days a week, work from home when sick and seldom take a holiday and replaced when someone better / cheaper comes along - work visas lol that’s a real funny one


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You mention scrum teams so I assume the organisation is doing some flavour of Agile? I'm no Agile expert and I'm fairly sure they're not "doing" it properly, but at my client co they insist that colocation is one of the core tenets of Agile and they've gone all vertically-aligned, so it's actually had the effect that the whole team has to be in London - dev, support, end users - pretty much the opposite of the offshoring road they were careering down just a couple of years ago.

[GhostofTarbera]

* Although in many cases agencies seem to want to sell themselves as organisations with a stock of staff on hand ready to fill any role...

And they have missed the boat

Try completing with sapient or wipro where the entire scrum teams are from outside the EU, 70% Indian but now Turkey / china / Russian who are prepared to work 12 hours a day, 7 days a week, work from home when sick and seldom take a holiday and replaced when someone better / cheaper comes along - work visas lol that’s a real funny one


Sent from my iPhone using Contractor UK Forum

[malvolio]

Fascinating conversation.

Just wondering why the agencies over the last 20 years haven't actually realised that they would save themselves a huge amount of work and risk by stopping selling people and starting selling skills? I've challenged several on this point and am usually met with some degree of dumb incomprehension (and that's talking to senior managers and some directors, not the junior on the resourcing desk). Now, come the new world, they may finally realise that what we been asking for since IR35 started is actually the whole solution.

Obviously some roles are inside IR35 so it makes no difference. But in my case, for example, there's no way I would ever be inside according to case law, so why is my contract stuffed with clauses trying to ensure that I am not an employee of the agency* or the client and imposing shedloads of conditions that simply do not apply to a supplier of services. Go take a look at the contract between your company and the office cleaners, for example.


* Although in many cases agencies seem to want to sell themselves as organisations with a stock of staff on hand ready to fill any role...