Clarification re IR35 Status. It's not good

[Martin Bank Holiday]

Got clarification from client on being forced to go FTC (see previous thread)

It seems that regardless of IR35 status, the choice will be to go FTC or contract via an approved agency and all the risk will be pushed to the agency.

So I could be found outside by the Client but the agency may (probably) not want to shoulder the risk and put me on PAYE or through approved brolly.

[Rebel]

Yes most companies don’t want anything to do with IR35. It’s too risky for them and plus it’s not clear cut. A lot of grey area and could end uplanding them with a bill from hmrc later down the line.

So companies like hsbc for example are simply bypassing it by enabling their temp contractors to go down the PAYE umbrella route. This doesn’t really work for a contractor as essentially you’re treated like an employee for tax purposes but really your not an employee your temp and can be dropped anytime. So it’s a shambles. The UK isn’t looking appealing for the talent pool and will result in a shortage of IT contractors as they will go elsewhere. It’s the average contractor that will lose it as they will have to go PAYE like an employee but they won’t have any rights and when they are out of work then it’s on their shoulders.

So all hmrc have done is make a mess of the contractor market.

[northernladuk]

Got clarification from client on being forced to go FTC (see previous thread)

It seems that regardless of IR35 status, the choice will be to go FTC or contract via an approved agency and all the risk will be pushed to the agency.

So I could be found outside by the Client but the agency may (probably) not want to shoulder the risk and put me on PAYE or through approved brolly.

No you couldn't. The client has made their choice so IR35 isn't a factor anymore.

[JohntheBike]

Got clarification from client on being forced to go FTC (see previous thread)

It seems that regardless of IR35 status, the choice will be to go FTC or contract via an approved agency and all the risk will be pushed to the agency.

So I could be found outside by the Client but the agency may (probably) not want to shoulder the risk and put me on PAYE or through approved brolly.

It's the end client who is required to deliver the SDS (not many are) and they are subject to the risks. If the end client requires you to go PAYE, with whichever organisation, then they are dispensing with all the risks. However, as I've said, not many organisations are delivering SDS.

[Martin Bank Holiday]

No you couldn't. The client has made their choice so IR35 isn't a factor anymore.

Yes, I could - they still are assessing the IR35 status of each role. Presumably on behalf of the preferred agency so the agency can make a decision themselves based on that decision should the individual want to follow that model instead of going FTC and being an employee of the client.

[northernladuk]

Yes, I could - they still are assessing the IR35 status of each role. Presumably on behalf of the preferred agency so the agency can make a decision themselves based on that decision should the individual want to follow that model instead of going FTC and being an employee of the client.

I thought your said regardless of status everyone is going FTC?

[LetterBox]

Yes, I could - they still are assessing the IR35 status of each role. Presumably on behalf of the preferred agency so the agency can make a decision themselves based on that decision should the individual want to follow that model instead of going FTC and being an employee of the client.

No...

The client makes the decision, they have the risk. They have deemed anyone they want will have to be FTC. The client no longer has to worry about IR35. The client tell the agency what the determinations are and the agency tell the candidate what the client has decided. The agency make no decision, the risk always remains with the client.

I think you may be being strung along here by the agency...

[Martin Bank Holiday]

I thought your said regardless of status everyone is going FTC?

The clarification is that there will be a choice. Go FTC or work through the agency who will get your IR35 determination from the client. If the determination is that you are outside then maybe you'll it'll be business as usual but since all the risk has been pushed to the agency I reckon they'll just put everyone inside and make everyone go through their brolly. Could be wrong.

[LetterBox]

The clarification is that there will be a choice. Go FTC or work through the agency who will get your IR35 determination from the client. If the determination is that you are outside then maybe you'll it'll be business as usual but since all the risk has been pushed to the agency I reckon they'll just put everyone inside and make everyone go through their brolly. Could be wrong.

The risk STAYS WITH THE END CLIENT....

[LetterBox]

Hopefully the FTC option will be direct with the client, you should get more benefits that way.

If the client does determine that a subset of people are IR35 inside then the agency will push them to an umbrella PAYE system. Although it's a risk to the client if a few years down the line that same subset argue successfully in court that the client got the determination wrong.

If the client does determine that a subset of people are IR35 outside then all groovy, however, this is the biggest risk to the client, so I cannot see this a likely outcome.

Hanging over the last 2 paragraphs is the assumption that the company have the internal staff / knowledge to correctly manage / determine the IR35 assessments. Most are not bothering, and if that is the case, all contractors will be deemed FTC, hands washed.