Hi,
If a single person company providing professional consultancy services engages a subcontrator to assist them are there any reporting requirements under the new Agency Worker Regulations assuming that PAYE is not deducted from any payments and the consultancy is not 'placing' the subcontractor within a clients business simply with a mark up?
Many thanks
Replies (5)
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Think it through
"If a single person company providing professional consultancy services engages a subcontrator to assist them" and if "the consultancy is not 'placing' the subcontractor within a clients business", it is not an agency and so, is not subject to the reporting requirements of the Agency Worker Regulations. The company is providing consultancy services, not staff, to the client.
But that doesn't mean that either the contractor or subcontractor won't be caught by IR35.
That depends
The rules for IR35 are more "forgiving" than those of s44 (I can't believe I've just suggested the rules for IR35 are forgiving)! S44 operates where an individual is provided by an intermediary to provide their personal service to a third party. The test is then are they subject to Supervision, Direction or Control. Obligation to provide personal service isn't considered, nor is Mutuality of Obligations (MOO) or any secondary factors such as intention of the parties. If under IR35 we are forced to concede on personal service and Control we might escape under MOO. So yes it is very likely that if S44 applies then IR35 would too, but it isn't automatic. Just remember that the courts have been fighting shy of using MOO to determine status/IR35 of late.
When referring to possible IR35 I wasn't focusing on the subcontractor/contractor/end client chain, but rather on the subcontractor/contractor and contractor/end client pairs, such the the subcontractor could be caught by IR35 as an employee of the contractor, and the contractor caught as an employee of the end client. This is separate from S44 considerations.
Ah ....... I see what you are looking at
If I have this right your concern is that the reporting requirement exemption only applies where the "intermediary" only provides the services of one individual. The second they subcontract the work to an assistant then the company is no longer only providing the services of a single person. But Euan has it right if the service is consultancy not provision of labour there is no reporting requirement. SteLacca is also correct IR35 could still apply dependant on the terms of the contract at each stage. I'll get me coat!