Factors to consider when searching for new contracts

23rd July 2019
Written by Qdos Contractor

IR35 compliance should be at the forefront of all PSCs minds, even when searching new contracts

The term Personal Service Company (PSC) was introduced in 1999 when it was used by Chancellor Gordon Brown. Although there is no clear definition of the term PSC it is usually the name used to refer to the limited company, who’s Director is the main fee earner and owns most, if not all, of the shares.

The key concern for most working individuals is ensuring they have a regular income stream. This concern is even more prevalent in the self employed and those working via their own Personal Service Company.

A PSC will need to seek out services to ensure an income and this is mainly done via an agency. Historically, agencies often contracted with PSCs as this was considered less of a risk and did not carry the annoyance of an employment relationship; this was not meant as a negative, it simply means the agency would not have to deal with issues such as holiday and sick pay. We believe this attitude will soon change when the IR35 reform is introduced in April 2020.

As most contractors are aware, IR35 will change when the reform is introduced on 6th April 2020, whereby the responsibility of determining IR35 status will rest with the client. Although this change should not make contractors complacent with regards to IR35; compliance should be at the forefront of their minds, right from the point of seeking work.

Some factors PSCs should consider when searching for a contract are:

  • Most contractors will find work via their agency, whereby services will be advertised. It is important for contractors to ensure that when responding to job advertisements, they do so as a limited company.

  • PSCs should consider the role they are responding to. For example, are they replacing an employee? Is the job to perform duties which are an essential and possibly a continuous part of the business? Both questions posed are consistent with employment. HMRC’s manuals state “As part of a status review you need to establish the nature of the worker’s job and whether other workers who are employees are doing similar work under similar terms and conditions.” (ESM 0504) A contract for services is more evident where the services are for a specific project, rather than a continuous service provision.

  • Consider your skill set. Would you require further training, if so, are you willing to invest in such training yourself. A positive pointer toward a contract for services is where the skills required cannot be sourced in house.

  • What is the on-boarding process? Are you required to attend an interview? If so, ensure this is a business meeting that provides you with the opportunity to showcase your company, the skills your company has and any historical services you can show as examples or to provide business references. Additionally, this is the ideal moment to discuss what the clients IR35 opinions are and consider the IR35 tests, such as substitution.


It is our opinion that, from April 2020, all roles should be advertised as falling inside or outside of IR35. This will assist contractors in searching for the best contract; and whilst under the new rules the liability will fall to the fee payer, ensuring compliance yourself will demonstrate good business practices.

Qdos Contractor
Written by
Qdos Contractor
Award-winning providers of insurance for the self-employed, Qdos are the leading authority on IR35, offering industry-leading employment status services to ensure the flexible working industry thrive. Qdos are the Best Contractor Insurance Provider 2022 and won the Queen’s Award for Enterprise in Innovation 2022 and 2017. 

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