New contract, IR35 Issue

[mantisimo]

Hi, I've just landed a new contract, under the warrenties section of the contract is this statement

the Consultancy is not a “managed service company” as defined in section 61B of the Income Tax (Earnings and Pensions) Act 2003 but that it is a personal service company which is compliant in all respects with IR35.

Does this mean I am inside IR35 and as such am subject to paying NIC and additional income tax?

Thanks

[eek]

Hi, I've just landed a new contract, under the warrenties section of the contract is this statement

the Consultancy is not a “managed service company” as defined in section 61B of the Income Tax (Earnings and Pensions) Act 2003 but that it is a personal service company which is compliant in all respects with IR35.

Does this mean I am inside IR35 and as such am subject to paying NIC and additional income tax?

Thanks

What does the lawyer from QDOS or lawspeed say having reviewed the contract?

[Old Greg]

Hi, I've just landed a new contract, under the warrenties section of the contract is this statement

the Consultancy is not a “managed service company” as defined in section 61B of the Income Tax (Earnings and Pensions) Act 2003 but that it is a personal service company which is compliant in all respects with IR35.

Does this mean I am inside IR35 and as such am subject to paying NIC and additional income tax?

Thanks

No, google managed service company. They just want to make sure you're not one of them.

They mean that if you are inside IR35, you are paying tax accordingly. Whether or not you are inside IR35 is a different issue.

[malvolio]

No, you're not an MSC, you are an independent UK Limited Company. MSCs, as far as we are concerned, have ceased to be, they have joined the choir invisible, they are no more....

There is no such thing as a PSC in law.

You are compliant with IR35 in that you have reviewed your position with expert advice (I hope) and have concluded it doesn't apply. Or not, as applicable.

[Qdos Contractor]

That sort of clause is becoming quite standard because of the transfer of debt provisions in the MSC legislation (basically HMRC can chase liabilities down the contractual chain - meaning the agency could foot the bill).

So it's basically saying 'you're not an MSC and are compliant with IR35'. It's a protective clause for the agency.

[BoredBloke]

That sort of clause is becoming quite standard because of the transfer of debt provisions in the MSC legislation (basically HMRC can chase liabilities down the contractual chain - meaning the agency could foot the bill).

So it's basically saying 'you're not an MSC and are compliant with IR35'. It's a protective clause for the agency.

That's a bit of a crap protective clause. Wouldn't it make more sense for the agency to offer as close to IR35 proof contracts as is possible. Then they could be fairly sure of that particular part of the contractor/client relationship.

[northernladuk]

Bearing in mind working practices are key here and HMRC are happy to disregard the contract when nailing a contractor surely this clause is about as useful as a chocolate fireguard?

[TheCyclingProgrammer]

That's a bit of a crap protective clause. Wouldn't it make more sense for the agency to offer as close to IR35 proof contracts as is possible. Then they could be fairly sure of that particular part of the contractor/client relationship.

I imagine agency doesn't care whether OP is inside or outside IR35 regs, just that if inside, they are paying he appropriate taxes.

[BoredBloke]

Bearing in mind working practices are key here and HMRC are happy to disregard the contract when nailing a contractor surely this clause is about as useful as a chocolate fireguard?

So if they are not interested in the contract, what's the point of having it reviewed? Does that mean that the whole contract review business that IR35 spawned is now out of the window?

In this case the agency wants the contractor to comit to being outside IR35, therefore they should be doing their part by ensuring that the contracts are IR35 proof.

[eek]

In this case the agency wants the contractor to comit to being outside IR35, therefore they should be doing their part by ensuring that the contracts are IR35 proof.

I didn't actual read it as that in the second paragraph which is why I asked if it had been checked.

Being compliant with IR35 could mean that the agency is expecting you to be treating the contract as under IR35 and therefore paying full NI and income tax on the contract.