Fully contracted-out services and IR35: Your questions answered

Chris Burke, Gareth Beck and Devina Ramanah shone a spotlight on a service that Morson Projects have been providing clients with, throughout our 40 years in operation. A service that now has the additional benefit of removing the IR35 burden from our clients.

During the 60-minute session, our expert panel explored fully contracted-out services – often referred to as a Statement of Work (SOW) or a bought-out service. The panel explained how Morson Projects can help businesses offload responsibility for IR35, and clearly define their requirements. They explored the necessary processes, procedures and tools required to ensure IR35 compliance and delved into a case study with an aerospace client who has achieved invaluable benefits from implementing a SOW.

During the session, the below questions were submitted. Our panel have since provided answers which might help you with your own IR35 preparations:

Where will you get people from if you can’t employ contractors?

We’re seeing a significant level of interest in workers wanting to join Morson Projects as staff and we have an appetite to grow our staff team. We will be assessing every engagement in isolation, so for those engagements we deem to be outside of IR35, we will continue to engage PSC workers. Those which fall inside will be accessed via our Umbrella PSL.

What are the timeframes of engagement if I’m to remain IR35 compliant?

If the challenge you currently face is suitable for a contracted-out solution, then Morson Projects would typically require 3-4 weeks to establish this. Ultimately, the legislation comes in to force on 6^th April 2021.  

If I don’t have a fully contracted-out service, what are my options?

Having a trusted supply chain is of paramount importance, now even more so. Therefore, for contingent worker engagement, we would strongly advise speaking to our sister company, Morson Talent.

We have hundreds of sub-contractors working for us. Some are large companies, some are sole traders and some are partnerships. Do we have to review every sub-contractor, or do we look at those that could be working under a PSC?

The short answer is that you only need to assess those workers providing their service via a PSCto you directly. To discuss this in greater depth, please don’t hesitate to contact Chris Burke via email or by calling 0161 707 1516.

How certain are Morson Projects that the IR35 legislation will come into effect in considering the current situation with the pandemic? Last year the decision was pushed back – the straw on the camel’s back was the pandemic.

The Government has reiterated its commitment to implementing IR35 reforms and provisions now enacted in the Finance Act 2020, which received Royal assent on 22^nd July 2020.

It is widely believed that it is unlikely the Government will abandon, fundamentally rethink, or delay the legislation. Organisations have been advised to make all necessary measures to prepare for the forthcoming reforms to IR35 and Morson Projects has undertaken this.

How closely do you work with Morson Talent? Do you offer contingent resource on your books to them?

Morson Projects work daily with Morson Talent (previously Morson International) to provide the best solution for our customers. Morson Talent are Morson Projects’ main supplier of contingent labour.  

Can an example scenario be described where Morson Projects utilises a contractor (PSC) to fulfil a client SOW?

We provide our customers with project solutions. To deliver these, we currently engage staff, Umbrella, and/or PSC workers. Post April 6^th, we will continue to do the same, whilst ensuring full compliance to the new legislation. A live example is detailed within the slides, which can be requested by emailing [email protected].