Are MSP also considered inside?

[PeterSim]

Seeing as I am starting to come to the realization that 99.9% of contractors are going to be deemed inside, because that is how the entire IR35 has been designed.

Are managed services providers also going to be seen as inside?

For example BT or another large managed service provider has a contract to upgrade a bit of software and they place an employee of theirs on site 35 hours a week for 12 months. That employee can be replaced by other staff within BT but he is not replaced for another employee over the 6 month period because that employee is a specialist in the software that that client requires and BT put no one on site for the days when the employee is not available. The employee also does not do any other work over the 12 month period for other clients.

If large managed services providers are exempt from IR35, then how is that reasonable or consistent?

If they are not deemed inside, then IR35 is going to seriously disrupt the competition in the managed service industry because every MSP started out as a limited company with one employee and grew from there.

[northernladuk]

They aren't exempt, it just doesn't apply as they are offering proper managed service products based on fixed or similar pricing with all the correct commercials in place.

It's such a different beast to us it's nearly not worth comparing. These things can end up as a way in to a client who they then star body shopping to which becomes a discussion however.

[PeterSim]

I can offer fixed pricing, will that make me exempt. What "commercials" are contractors missing exactly, we often have the same sort of insurance.

If myself and a few other contractors create a limited company together and then cover each other, wouldn't that make us act like an MSP and make sure we stay outside.

Surely certain contracts to MSP should be included in the IR35 audit because they are no different than other contracts.

The way I see it, I am competing with certain MSP when I go for a job. So how is it a fair competition if they can offer their service through a limited company but i am forced to offer it through an umbrella company. H

How can I develop a brand and a company if I am forced to work through an umbrella company?

[pr1]

The BT employee has <5% shares in BT so is unaffected by IR35

[Lance]

I can offer fixed pricing, will that make me exempt.

No. Not on it's own. Read the guides to the right.

The BT employee has <5% shares in BT so is unaffected by IR35

Which is completely irrelevant to LTDco contractor working for BT. Who *is* affected by IR35.

[Lance]

For example BT or another large managed service provider has a contract to upgrade a bit of software and they place an employee of theirs on site 35 hours a week for 12 months. That employee can be replaced by other staff within BT but he is not replaced for another employee over the 6 month period because that employee is a specialist in the software that that client requires and BT put no one on site for the days when the employee is not available. The employee also does not do any other work over the 12 month period for other clients.

In that scenario it is the client of BT who makes the determination of IR35 status. Not BT.
BT being able to provide a substitute is immaterial as it's the contractor providing a substitute that counts. The client cannot accept that easily as they will be an unknown even to BT.
That's my understanding anyway.

[PeterSim]

In that scenario it is the client of BT who makes the determination of IR35 status. Not BT.
BT being able to provide a substitute is immaterial as it's the contractor providing a substitute that counts. The client cannot accept that easily as they will be an unknown even to BT.
That's my understanding anyway.

I am aware of how IR35 works, i know the client is the one doing the assessment, how is that relevant to the question?

[northernladuk]

I can offer fixed pricing, will that make me exempt. What "commercials" are contractors missing exactly, we often have the same sort of insurance.

If myself and a few other contractors create a limited company together and then cover each other, wouldn't that make us act like an MSP and make sure we stay outside.

Surely certain contracts to MSP should be included in the IR35 audit because they are no different than other contracts.

The way I see it, I am competing with certain MSP when I go for a job. So how is it a fair competition if they can offer their service through a limited company but i am forced to offer it through an umbrella company. H

How can I develop a brand and a company if I am forced to work through an umbrella company?

Dunno where to start with any of this :/

[Lance]

I am aware of how IR35 works, i know the client is the one doing the assessment, how is that relevant to the question?

OK. Let's address your questions.....

Seeing as I am starting to come to the realization that 99.9% of contractors are going to be deemed inside, because that is how the entire IR35 has been designed.

Are managed services providers also going to be seen as inside?

No they won't be seen as inside, as companies are not inside or outside. Individual contracts, where the contractor is running a one-man business, are either inside or outside.

If large managed services providers are exempt from IR35, then how is that reasonable or consistent?

They're not. Their permie staff will not be affected. Their contractor staff will have to be determined by the end client or the MSP depending on the details of the engagement between the end client and the MSP (NOTE that it starts to get really complex here as it's fundamentally not tested in law, unlike other IR35 legislation).

[PeterSim]

OK. Let's address your questions.....

No they won't be seen as inside, as companies are not inside or outside. Individual contracts, where the contractor is running a one-man business, are either inside or outside.


They're not. Their permie staff will not be affected. Their contractor staff will have to be determined by the end client or the MSP depending on the details of the engagement between the end client and the MSP (NOTE that it starts to get really complex here as it's fundamentally not tested in law, unlike other IR35 legislation).

OK. I assume that you would be able to work out what I am saying. I realize I need to more clear with my language.

I was not implying that BT would be considered inside, I am referring to STAFF of BT being considered inside when placed at clients in the same way that contractors place STAFF at clients.

I am a permie staff member of my limited company. My question is should clients be considering the IR35 status of STAFF of MSPs placed at said clients on contracts that are no different compared to the contracts that so called "PSC" are on. Personal service company versus managed service company, how can one distinguish between the two in the context of determining the IR35 status. Why should clients ignore the IR35 status of contracts with MSP but be forced to determine the IR35 status of contracts with so called "PSC".

I am sure it is against some competition law to force companies in to PAYE when competing with other companies that are not forced in to PAYE. I will look in to this, I am not a lawyer though.