Any business can call itself a “Consultancy”. When undertaking IR35 contract reviews we often encounter problems in this area with the need to establish if a consultancy is acting as a consultancy (supplying services) and is the client for IR35, or is really acting no differently to an agency/employment business in the contracting relationship and so is not the client for IR35. The difference is critical to deciding IR35’s current application.
We’ve had significant success when the Off-Payroll rules were introduced in the public sector in April 2017 and then rolled out to the private sector in April 2021, and managed to prove that many consultancies were exempt from the new rules, as they were providing genuine outsourced services which they were wholly responsible for, including any decisions on workers used and who held responsibility for and control over those workers.
However, great care needs to be taken in this regard to ensure that the Consultancy is genuinely providing services rather than people or any kind of a mixture of both.
With the new Off-Payroll rules for the private sector the only exemptions from the rules is for small companies and wholly overseas companies. We have already seen a significant growth in the small consultancy.
We offer a whole range of services to help all concerned parties with IR35/Off-Payroll compliance.