RBS, contractors and IR35

[oliverson]

I think that the pattern described here will be repeated many times.

The big users of contractors very often have a limited number of large recruiter/agencies servicing their needs.

All of those big recruiters/agencies are now facing a complete change of business model as the end client seeks to de-risk their engagement of contractors.

The recruiters/agencies will no doubt have close working relationships with the end clients and are perhaps working with them to devise policies for the new world.

At the end of the day however the net result will be fewer contractors working that way. This reduces agency fees and for some this is existential.

An agency encouraging an end client to be lenient in its application of the IR35 status rules, risks being held liable as the fee payer. That's a potentially tricky balancing act.

I very much fear that agencies and other intermediaries will be looking to individuals to recoup lost revenue and encourage individuals to be at the margins in terms of IR35.

Spoke to an agent recently who represents one of the major agencies who said this really is existential for them. Said they were having their contracts rewritten to favour a 'supplier/customer' engagement. This is much along the lines of my current 'direct' contract. My name doesn't even appear in the contract, it's supplier this, customer that. Goes to great lengths to denounce SDC, etc. I think a few other agencies, the big players, may well go down this very route. Let's hope so.

[MrC]

All very valid points.

We have seen it suggested for instance that the contractor having secured the gig, arranges for a substitute to go and pick up their door pass etc prior to starting work, thus proving substitution has taken place. My view is that this is unlikely to be seen as substitution.
.

One difference between what the contractor and the client want is a contractual and real world acceptable right of substitution. The client would only want it as a means to an end ie being outside. In most work that contractors are hired for there is too much specific knowledge and experience of the clients systems and processes for a substitute to be immediately effective. A full right to substitution could see a new contractor turning up to the same gig day after day and the client would loose out big time with productivity.

Moreover if it's totally legitimate and acceptable to substitute many contractors would just go elsewhere the moment a better paid/closer to home/more interesting gig etc etc arose.

[ascender]

Having not so long been in the Bank, I've lost track of how many messages have been going around the groups about this news story - the hunt is still on to find a single contractor who's seen the alleged comms!

[northernladuk]

Having not so long been in the Bank, I've lost track of how many messages have been going around the groups about this news story - the hunt is still on to find a single contractor who's seen the alleged comms!

It went out to all the contractors they believe are actually worth keeping. HTH.

[TheInvoicer]

It went out to all the contractors they believe are actually worth keeping. HTH.

So no one got the e mail? [emoji2]


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[webberg]

Spoke to an agent recently who represents one of the major agencies who said this really is existential for them. Said they were having their contracts rewritten to favour a 'supplier/customer' engagement. This is much along the lines of my current 'direct' contract. My name doesn't even appear in the contract, it's supplier this, customer that. Goes to great lengths to denounce SDC, etc. I think a few other agencies, the big players, may well go down this very route. Let's hope so.

Thanks for the info.

I will repeat a key piece of my thinking and logic here.

The contract you have, its words, its application to your day to day tasks - accurate or otherwise, its terminology, is an important but not pivotal piece of the puzzle in determining inside/outside IR35.

It used to be the case that contractors were told that being part of a particular structure or using a PSC or having a certain contract format made you "safe" from IR35. None of that is true.

Read the cases. The Tribunals look at the work being done and how it is done and who operates SDC and then imagines whether a contract could be written that would encompass all of that and if so, would it be an employment contract?

So the contract comes at the end of the process and is not the start point.

Part of the problem here is that the assumption that you can sign something that protects you is false.

[webberg]

Moreover if it's totally legitimate and acceptable to substitute many contractors would just go elsewhere the moment a better paid/closer to home/more interesting gig etc etc arose.

And there you have the key lever in any rate negotiation with an end client.

If they want your skills and want you outside IR35 (for their own convenience and cost reasons), they have to offer a rate you like and an ability to review it as and when required.

How many contractors realise/insist on this now?

I'll wager, not many.

How many should be doing this in the lead up to April 2020?

I'll wager again, not many - but they should.

[JohntheBike]

And there you have the key lever in any rate negotiation with an end client.

If they want your skills and want you outside IR35 (for their own convenience and cost reasons), they have to offer a rate you like and an ability to review it as and when required.

How many contractors realise/insist on this now?

I'll wager, not many.

How many should be doing this in the lead up to April 2020?

I'll wager again, not many - but they should.

"want you outside IR35"

that will be unlikely given HMRC's bullying position

"How many contractors realise/insist on this now?"

how many have had the opportunity to negotiate, even in the past?

[webberg]

Do not confuse the "old think" with the "new think" required in a market which is about to go through a major reform.

There is a disruptive period ahead and it impacts all players and those bold enough to push for better terms and more protection will set a precedent for others to follow - if - and only if - they are supported.

Blindly accepting defeat before the battle starts is a surefire way to be once again at the bottom of the pecking order.

[JohntheBike]

Do not confuse the "old think" with the "new think" required in a market which is about to go through a major reform.

There is a disruptive period ahead and it impacts all players and those bold enough to push for better terms and more protection will set a precedent for others to follow - if - and only if - they are supported.

Blindly accepting defeat before the battle starts is a surefire way to be once again at the bottom of the pecking order.

"support" in any arena, will only ever be given to an individual if that individual's goal matches the ideology and agenda of those who are giving the support. As far as I can see, those organisations who might be in a position to support an individual in the IR35 arena, all seem to have varying agendas on what should or can be done.

There are too many who are blindly accepting defeat and are not prepared to put up a fight. However, the ongoing Alcock case is one to watch.

I'm keeping my powder dry for the moment as there are too many unknowns in my personal circumstances for me to develop a strategy. However, I'm under no illusion that any organisation will support me in any way, as any possible action I might take certainly doesn't concur with the agenda of some of the major players.