I have a client who does IT consultancy work through an agency. The structure is end client - agency - my client (an individual). The only limited company involved is the agency. My client does not own the agency or is not otherwise related to the agency except that he uses its services to get contracts.
I have thought about this and I understand that the IR35 legislation is not relevant here in any but perhaps MSC legislation is? In which case isn't it the responsibility of the agency to pay my client (the individual) by making the appropriate paye and nic deductions.
I am also a bit thrown by the old employment v self employment issue.
So what do I need to consifer - IR35 (I dont think so), MSC (not sure) or employed v self employed.
I have read some where that we should not only be examining the contract between the agency and the individual but also the contract between the end client and the individual.
Has anyone experienced similar issues and come up with an answer?
Thanks
Anon
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IR35 MSC
Dear Anon
As the Agency regulations no longer allow an agency to use the services of sole traders, I am assuming that your client is either being paid PAYE by the agency in which case IR35 and MSC will not apply.
If he is operating through his limited company, then both IR35 and MSC legislation will potentially apply to them.
Without going into a huge stream of case law and legislation. The short and sweet version is...
IR35 situation will depend on the contractual relationship he has with the agency, and also gven recent case law to the contractual position of the upper contract ( i.e. agency client)
MSC legislation comes into play in relation to the manner in which your clients accounts/ administration is prepared.
They are distinct and separate peices of legislation and you should be aware of both.
If you want to chat further give me a call contact details are on our website http://www.defacto-fd.co.uk
Fiona Purves
Defacto Fd