Contractors switching to a Consultancy to remain outside IR35 Contractors switching to a Consultancy to remain outside IR35
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  1. #1

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    Default Contractors switching to a Consultancy to remain outside IR35

    I fully appreciate that this has been kind of covered elsewhere in other threads but this appears to be getting very real ....

    If contractors (in very large numbers) are allowed by their existing agencies to switch over to an existing Consultancy firm who will then invoice the existing client (a Bank) and then get the contractors to invoice them (the Consultancy firm) via their still intact Limited Company .... will this be deemed outside of IR35? If I were to tell you you that the contracts between the Consultancy firm and the Bank were all for fixed term periods and for project work and rates would be exactly the same ... would this make any difference?

    I personally thought ... not going to make a difference ... far too simplistic.

    But currently plans are in place to do exactly this at a massive London based Bank....effectively moving over hundreds of contractors and keeping them outside of IR35.

    Note I am not one of the contractors.
    Last edited by mogga71; 11th September 2019 at 18:40.

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    Nope.

    There's still an intermediary in between the client and the contractor. So the engagement would still need to be assessed by the client.

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    For something that is getting real you've got a lot of reading to do... And yes, it's been covered in many many places, and not kind of. In great detail.

    These consultancy approaches were also suggested when the public sector changes hit and never came to fruition.
    Last edited by northernladuk; 11th September 2019 at 19:18.
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    Quote Originally Posted by mogga71 View Post
    I fully appreciate that this has been kind of covered elsewhere in other threads but this appears to be getting very real ....

    If contractors (in very large numbers) are allowed by their existing agencies to switch over to an existing Consultancy firm who will then invoice the existing client (a Bank) and then get the contractors to invoice them (the Consultancy firm) via their still intact Limited Company .... will this be deemed outside of IR35? If I were to tell you you that the contracts between the Consultancy firm and the Bank were all for fixed term periods and for project work and rates would be exactly the same ... would this make any difference?

    I personally thought ... not going to make a difference ... far too simplistic.

    But currently plans are in place to do exactly this at a massive London based Bank....effectively moving over hundreds of contractors and keeping them outside of IR35.

    Note I am not one of the contractors.
    It's just like 1999 again.
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  6. #6

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    Quote Originally Posted by northernladuk View Post
    For something that is getting real you've got a lot of reading to do... And yes, it's been covered in many many places, and not kind of. In great detail.

    These consultancy approaches were also suggested when the public sector changes hit and never came to fruition.
    Actually this did happen...just not on a large scale.
    I have spoken to a couple of agencies who used to supply only to the public sector (so when offpayroll to the PS came in it hit them hard) and actually worked a gig like this.
    Their solution...create a consultancy arm of the agency. They go to the PS and provide a fixed quote for the work. They then hire the contractor to the consultancy to do the work.
    On paper (i.e contract) it works as there is no mention of the PS its a contract direct with the consultancy.
    Working practicies on the other hand....

    The gig I did recently I was able to make sure the working practices were well outside (As much as I could).

    I see the same thing happening in the private sector next year. All these small companie agencies (less than 50 staff, less than £10m turnover) will just spin up a consultancy arm and start taking on the work as packages/deliverable rather than placing a contractor on a T&M basis.

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    Quote Originally Posted by MonkeysUncle View Post
    Actually this did happen...just not on a large scale.
    I have spoken to a couple of agencies who used to supply only to the public sector (so when offpayroll to the PS came in it hit them hard) and actually worked a gig like this.
    Their solution...create a consultancy arm of the agency. They go to the PS and provide a fixed quote for the work. They then hire the contractor to the consultancy to do the work.
    On paper (i.e contract) it works as there is no mention of the PS its a contract direct with the consultancy.
    Working practicies on the other hand....

    The gig I did recently I was able to make sure the working practices were well outside (As much as I could).

    I see the same thing happening in the private sector next year. All these small companie agencies (less than 50 staff, less than £10m turnover) will just spin up a consultancy arm and start taking on the work as packages/deliverable rather than placing a contractor on a T&M basis.
    This exact scenario you just described is happening right now at a major Investment bank in London. In the coming weeks I would imagine it's going to be all over the contracting news. Hundreds of contractors are (very likely) switching over to an already established Consultancy firm in October.

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    Quote Originally Posted by mogga71 View Post
    This exact scenario you just described is happening right now at a major Investment bank in London. In the coming weeks I would imagine it's going to be all over the contracting news. Hundreds of contractors are (very likely) switching over to an already established Consultancy firm in October.
    Anyone taking bets on this not working as expected at all?
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    Quote Originally Posted by northernladuk View Post
    Anyone taking bets on this not working as expected at all?
    I personally would have thought it won't work .... however I have been reliably informed that legal teams have been all over it and it will work. I would expect it to be front page news pretty soon so I guess we will find out.

  10. #10

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    Quote Originally Posted by MonkeysUncle View Post
    I see the same thing happening in the private sector next year. All these small companie agencies (less than 50 staff, less than £10m turnover) will just spin up a consultancy arm and start taking on the work as packages/deliverable rather than placing a contractor on a T&M basis.
    Why can't businesses just post business contracts direct on job boards and then us contractors go b2b with the client on a fixed quote. Why on earth does it have to go through a middle man.

    It makes no sense.

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