End client mentioned in a contract End client mentioned in a contract
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  1. #1

    Nervous Newbie

    Join Date
    Feb 2020

    Default End client mentioned in a contract

    I operate through a PSC and have been on an outside-IR35 contract with a UK-based recruitment agency for a few years. The client, for the purpose of this contract, is a large consultancy. This consultancy has a number of business clients in the UK, one of them being a large insurance agency. I have been working on insurance agency's projects across a number of offices they have in the UK. However, I have never had any formal contract or agreement with the insurance agency and have never given them any of my tax or PSC details. Even my timesheets are approved by the large consultancy, mentioned as the "client" in my contract.

    In line with IR35 changes this year, this consultancy has appled a blanket ban on PSCs and is now asking me to continue working through PAYE arrangements or through an umbrella company. The usual story but with IR35 fears looming large, I am about to reject this offer and am instead toying with the idea of accepting an inside-IR35 contract being offered to me directly by the insurance agency itself. This contract, as usual, will be executed through a recruitment agency but different to the one I am currently contracted with.

    My question is, is this set-up as risky as accepting PAYE arrangements while working for the "same client"? Will the fact that I will now be coming through a different recruitment agency and working, for the records, for a different client (the insurance agency instead of the consultancy) provide any mitigation in terms of avoiding risks of a prospective IR35 enquiry in the future? Also, is it safe to assume that on the basis of data taht will now be submitted, HMRC should believe I have actually switched contracts and am now operating on an inside-IR35 contract for a different client?

  2. #2

    My post count is Majestic

    northernladuk's Avatar
    Join Date
    Mar 2009


    Most important question will be what will you be doing at the insurance company. Is it the same role, or close as dammit, as you were doing before?

    Second is around handcuffs. Sounds like a bit of a mess unless it's a completely different role in different area.

    Everything hinges on the details here. The original post hadn't got enough to help us answer you.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  3. #3

    Super poster

    Join Date
    Apr 2015


    I don't see how HMRC is going to connect the dots between role one and role two. You were a contractor working through an agency for a client (the consultancy). HMRC will know you were working through that agency but may not even know who the client was.

    Now you'll be working for a different client. It's a different contract, a different role, a different agency, a different client. It's all different. Your inside role does not say anything about your prior role.

    But I probably would in your situation go ahead and close your Ltd Co as quickly as reasonable, just to forestall any problems.

    There is the issue of handcuffs, though. Was there any clause in your contract with the agency forbidding you to work for the client OR the client's clients for 3 or 6 or 12 months? If so, you might have an issue there. It's not an IR35 issue, it's an agency coming after you because they will think they should be getting a piece of this action.

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