IR35 – SoW as a Solution – Specialty Insurance

Background

In March 2020, a leading global specialty insurer made the decision that they would not be directly engaging PSC contractors from April 2020 following the Government's proposed IR35 changes. Consequently, several key projects were deemed to be at risk from key contractors leaving to pursue alternative contract roles elsewhere. 

Why the client chose us

We met with the client’s senior technology management team and proposed transforming how they engaged resources from their existing recruitment-based engagements to an outcome-based services engagement. This in turn would enable the client to retain the knowledge and skills held by their existing contractors at the same time as removing all their risks from IR35. It would also bring a number of additional benefits, including lower client management overheads, higher productivity and greater visibility of what their consultants were doing day to day whilst working remotely.

The client was so convinced of these benefits that they elected to still transition the service to an outcomes-based Statements of Work (SoW) engagement in April 2020, even though the Government delayed the implementation of the IR35 changes to April 2021. 

What we did

Once commercials and a Master Services Agreement had been agreed, our Engagement Delivery Manager worked with the client’s technology leadership team to review all current project engagements, operating practices and future needs to draft a series of SoWs to articulate the roles, services, and in-scope projects.  
  
The Engagement Delivery Manager then worked with all the existing in-scope contractors and the relevant Project Managers to shape the detailed scope, deliverables, payment milestones and acceptance criteria in both the upper contract (the SoW) and each individual contractor’s Sub Consultancy Agreement.
 
Following this, they worked to ensure that the new operating practises were agreed and clearly understood by all parties for our service to be what HMRC would determine as a ‘fully-contracted-out service’. Thereby, ensuring we would become the ‘hirer’, and not the 'client'.  

What we achieved 

  • All the key contractors were happy to stay on the client's projects as we were able to offer them genuinely outside IR35 engagements and contracts. This meant knowledge was retained and projects were kept on track
  • The process of producing a formal SoW with detailed scope and deliverables for each role and project helped provide clarity around the project's priorities and key outcomes. This, in turn, helped enable the client to improve their own internal stakeholder communications and ability to report progress against key deliverables  
  • The fact that deliverables were tied to payment milestones, in both the upper contract (the SoW) and the lower contracts (our Contractor Associates' Sub Consultancy Agreements), helped everyone to focus on delivering outcomes. This resulted in noticeably higher productivity and several deliverables being met early, which meant that several services finished sooner than expected, saving the client money in the process
  • We have introduced several process improvements, including increased automation and tooling as part of the service, further increasing productivity as a result
  • The client continued to access the best of the UK contract workforce by William Alexander Consulting’s ability to offer outside IR35 contracts. This has meant that the client has not suffered the same resourcing issues felt elsewhere in the market and that they have continued to attract the best resources from their competitors
  • We continue as the client’s preferred professional services delivery partner today, and we now have over 15 Contractor Associates engaged with the client delivering Project Management, Analysis, Development and Testing services.