New contract within IR35 by default?
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  1. #21

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    I think this will become increasingly common, and may well be driven by the client as much as the agency. They're going to be increasingly nervous about being responsible for paying NI.
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    Quote Originally Posted by MrMarkyMark View Post
    OK, but surely putting a sub on site would actually cover ROS and MOO, in reality, concurrently?

    Anyways, @ OP looks like you may have hit a brick wall with this one, unless you can get the terms changed?
    Even then the working conditions sound well iffy.
    It absolutely nails RoS.

    HMRC don't like RoS, because it is a right I. E. you don't need to enforce it. They don't like MOO either, in part because no-one really knows if it's during or at the end of a contract (there are examples somewhere) and because you can argue that by turning down an extension there was no MOO and hence the contract fell outside IR35.

    HMRC do like SDC because it's easy to argue there must be some sort of it, regardless of how weak. Additionally they set the bar low for themselves by stating it just needs to be one of the three. And just in case that doesn't hit the spot, they are also assuming SDC applies by default and the burden of proof is on us to show otherwise. It's nice to be able to make up the rules.

    OP, is it just that client or all people source clients? Personally I would tell them to fo or quote a higher rate. However, if you are getting g paid lunch breaks etc then it may just be that the client wants that contract is within ir35 and that's the end of it.

  3. #23

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    Default Listen to QDos

    They don't want a contractor, they want a temporary worker. You are a contractor. It's not a fit for the role and the agency should have identified this before submitting you.

    They have wasted everyone's time including their own.

    Move on.
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    Quote Originally Posted by Eirikur View Post
    This remark may have been in jest, but it made me wonder, does anybody ever quote two rates to an agency one in case the contract falls Inside and one outside of IR35?
    I can't imagine this would work for one minute. The agency has a gig on offer with set terms. Take it or leave it. They don't care if you are inside or outside. What you see is what you get. They aren't going to go pestering the client over rates because of your tax position.
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    Quote Originally Posted by GB9 View Post
    HMRC do like SDC because it's easy to argue there must be some sort of it, regardless of how weak. Additionally they set the bar low for themselves by stating it just needs to be one of the three. And just in case that doesn't hit the spot, they are also assuming SDC applies by default and the burden of proof is on us to show otherwise. It's nice to be able to make up the rules.
    AFAIK this is not the case for IR35. It is however the case for T&S for brolly workers. IR35 remains unchanged and based on existing case law which reflects S & D & C as the test.

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    Quote Originally Posted by northernladuk View Post
    I can't imagine this would work for one minute. The agency has a gig on offer with set terms. Take it or leave it. They don't care if you are inside or outside. What you see is what you get. They aren't going to go pestering the client over rates because of your tax position.
    True the agent or the end client doesn't care, but as a contractor you would need to know before hand what the agency intends to do with regards to IR35 so you can work out if the contract is worth it?

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    Quote Originally Posted by GB9 View Post
    Control
    RoS
    MOO

    You only need to demonstrate one in your favout to be outside ir35. In reality the judge would look at all in parallel. However, if you were subject to control but also put a sub on site, I think the chances of being found inside ir35 would be zero.

    Plenty of eminent posters have pointed out the discrepancy between brollies and Ltd regarding the possibility of claiming expenses for a Ltd but not for a brolly, even though both may be subject to control.
    Now I've heard this a lot and there is some merit in making sure you have at the very least a clear pass on one of these I don't think it's nearly enough and I certainly wouldn't be breathing easier on that alone for a couple of points..

    Firstly... what do you need to demonstrate it beyond argument? Until you apply RoS it's just wording. How do you demonstrate there is no MoO until after the gig? Who's definition of D&C is enough to be water tight. I just don't think you can demonstrate any of the clearly enough to take away any doubt.

    Secondly.. Demonstrating one might help but it certainly gives HMRC enough ammo to dig hard.. and that is often the worst case of investigations. You might win but by god it's going to be a harrowing experience.

    Thirdly.. How do you know there are not a whole host of other flags, primarily part & parcel that trumps your one pillar of evidence? How does that evidence you have degrade over time as well. In the JLJ case there were a whole host of factors that came in to play that started off with him in the clear and then royally shafted him at the end.. the main one was part and parcel... and that isn't one of your pillars...

    I think hoping that one pillar will put you in the clear is a very risky approach. The best approach is to have as many covered as you can and a whole raft of supporting evidence.. i.e. you do things properly so you are a supplier, not a permatractor looking for an easy out.
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    Quote Originally Posted by northernladuk View Post
    I can't imagine this would work for one minute. The agency has a gig on offer with set terms. Take it or leave it. They don't care if you are inside or outside. What you see is what you get. They aren't going to go pestering the client over rates because of your tax position.
    I think in the future it will be less about tax and more about T&S costs. For 'inside' gigs the contractor pool will be locals only. Maybe this will make them rethink those mandatory meetings.

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    Quote Originally Posted by suityou01 View Post
    They don't want a contractor, they want a temporary worker. You are a contractor. It's not a fit for the role and the agency should have identified this before submitting you.

    They have wasted everyone's time including their own.

    Move on.
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    This thread is a great advertisement for the failure of gov't policy w/r to IR35. There are as many different understandings as posters

    To the OP: you're wasting your time with this one. Also, FWIW, there's little point in sending a contract for review when it's a clear fail. Opinions vary on this, but my view is that you should negotiate to contract to a point that it's worth reviewing. Even if you could get the contract completely rewritten, which seems unlikely, their intention is probably to hire a temp, and the working practices would reflect that.

    More generally, in terms of reviewing working practices, the best thing you can do is to discuss the working arrangements with the client (i.e. to add some colour to the contractual terms) and relay this to the reviewer, but you never really know until you've been onsite for a while, at which point you should document and re-review (informally, at least).

    Although SDC has been around for decades, the case law test for control is broader than SDC (which is most closely related to the "how" element of control), and it remains to be seen how the "SDC Test" will be viewed in future case law. That being said, the interpretation of control is very well-established as being not "any" degree of control, but a sufficient degree of control. The facts are interpreted in the round to establish whether the picture is one of employment according to the degree of control ("bound hand and foot"). As others have indicated, this is only one aspect of IR35, but it's worth bearing in mind that the courts frequently differ from HMRC in their interpretation of law. In my view, SDC isn't a game changer if you pass the "how" element of an existing control test, but having the client form a judgment is a game changer, and this sort of pre-emptive behaviour by clients/agents is an early warning of that.

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