Some IR35 unfriendly contract wording ....or not?

[I just need to test it]

So if you've got a bullet-proof contract but you can't even go for a wee without the client's permission then HMRC will consider you inside IR35.

But what if the situation is directly inverted? i.e. you have a contract stating you are the client's bitch but in fact you have absolute freedom to deliver the work on your terms? Are you still considered inside IR35?

Is having a bullet-proof contract simply a means of putting HMRC off the scent?

[LisaContractorUmbrella]

So if you've got a bullet-proof contract but you can't even go for a wee without the client's permission then HMRC will consider you inside IR35.

But what if the situation is directly inverted? i.e. you have a contract stating you are the client's bitch but in fact you have absolute freedom to deliver the work on your terms? Are you still considered inside IR35?

Is having a bullet-proof contract simply a means of putting HMRC off the scent?

IR35 is and always has been about working practices it's just that, historically, HMRC assumed that what was written in a contract was reflective of what happened in reality.

[tractor]

...

IR35 is and always has been about working practices it's just that, historically, HMRC assumed that what was written in a contract was reflective of what happened in reality.

In the past, HMRC would also cite the contract if it was more beneficial to them or the reality if it was vice versa i.e they wanted their cake and to eat it. I don't know how they play it now.

[jamesbrown]

So if you've got a bullet-proof contract but you can't even go for a wee without the client's permission then HMRC will consider you inside IR35.

But what if the situation is directly inverted? i.e. you have a contract stating you are the client's bitch but in fact you have absolute freedom to deliver the work on your terms? Are you still considered inside IR35?

Is having a bullet-proof contract simply a means of putting HMRC off the scent?

The second scenario is just going to create a major headache, even if you come out on top. I don't think anyone would want a lengthy investigation by choice. If the contract is poorly worded, the chances of ending an investigation quickly are going to be reduced, plus there's always a degree of risk that you haven't documented the working practices adequately or the end client fails to confirm them adequately (e.g. due to time elapsed). Better to have a strong contract and to retain clear evidence of working practices (e-mails where you notify of time off, evidence of refusing work, evidence of lack of D&C in terms of what/where/when/how, differences in treatment of contractors vs. permies, use of subcontracting/substitution etc.) in order to stop an investigation quickly.

[northernladuk]

It's hard not to pay attention to the two professionals who have contributed thus far.

Yeah, when NLUK and LisaContractorUmbrella post advice you would do well to listen!!

[tractor]

...

Yeah, when NLUK and LisaContractorUmbrella post advice you would do well to listen!!

Sorry Lisa, I meant 3

[LisaContractorUmbrella]

Sorry Lisa, I meant 3

[eazy]

REC Contract ?

Looks like a REC contract with slight modifications. Below are another version of the key clauses.

Substitution
The Consultancy shall be entitled to assign, substitute or sub-contract the performance of the Consultancy Services provided that the Consultancy is satisfied that the assignee, substitute or sub-contractor has the required skills, qualifications, resources and personnel to provide the Consultancy Services to the required standard and that the terms of any such assignment or sub-contract contain the same obligations imposed by this Agreement. The consultancy’s obligation to provide the consultancy services shall be performed by such member or members of the consultancy’s employees, officers or representatives (“representative(s)”) as the consultancy may consider appropriate. Prior written consent from the client will be required before substitution can take place and consent will not be unreasonably withheld.

Control
The Consultancy shall have autonomy in relation to determining the method of performance of the Consultancy Services but in doing so it shall co-operate with the Client and comply with all reasonable and lawful instructions, as are applicable to an independent contractor, within the scope of the Consultancy Services and the Assignment made by the Client. The Employment Business shall use reasonable endeavours to ensure in the Employment Business’s contract with the Client that the Client shall not be entitled to exert any supervision, direction or control over the manner in which the Consultancy Services are performed.

Mutality of Obligation
The Employment Business has no obligation to offer future work to the Consultancy and if it does make any such offer, the Consultancy is not obliged to accept it. The Employment Business is not obliged to pay the Consultancy at any time when no work is available during the current Assignment.

[Olly]

....hmm so talking further to the agency they have basically said "we're not changing the contract".

It's interesting to hear the different and somewhat divergent professional views, hence exactly why I try to become knowledgeable on such matters myself.

I'm happy to share the full contract but there is nothing else particularly negative in respect of IR35 (and not much positive either).

At the end of the day the working practices of the contract will be like the ones the vast majority of us on this site do...taking up the gaps because the client feels (for what ever reason) a contractor is best placed to fill that role(s).
I'll "report to" a line manger or two in terms of them asking me to do stuff, I'll almost certainly not provide a substitute. Nobody will tell me exactly how to do the job because we're a bit beyond that in terms of skillset and seniority, but then again, being told exactly "how, where and when" something should be done rather than being tasked with meeting a goal has been the norm for most of my working life and I expect for yours.

IR35 insurance is something I'll consider, in fact I'll almost certainly take it up since this role is my highest day rate so far and not to shabby by most people's standards.

Anyway, they say they won't modify it, one professional isn't sounding alarm bells, the other is, I don't fancy calling the agency's bluff based on mixed messages when there's the option to protect against it.

Mind you, going to read the fine print of any insurance carefully!!

[jamesbrown]

....hmm so talking further to the agency they have basically said "we're not changing the contract".

It's interesting to hear the different and somewhat divergent professional views, hence exactly why I try to become knowledgeable on such matters myself.

I'm happy to share the full contract but there is nothing else particularly negative in respect of IR35 (and not much positive either).

At the end of the day the working practices of the contract will be like the ones the vast majority of us on this site do...taking up the gaps because the client feels (for what ever reason) a contractor is best placed to fill that role(s).
I'll "report to" a line manger or two in terms of them asking me to do stuff, I'll almost certainly not provide a substitute. Nobody will tell me exactly how to do the job because we're a bit beyond that in terms of skillset and seniority, but then again, being told exactly "how, where and when" something should be done rather than being tasked with meeting a goal has been the norm for most of my working life and I expect for yours.

IR35 insurance is something I'll consider, in fact I'll almost certainly take it up since this role is my highest day rate so far and not to shabby by most people's standards.

Anyway, they say they won't modify it, one professional isn't sounding alarm bells, the other is, I don't fancy calling the agency's bluff based on mixed messages when there's the option to protect against it.

Mind you, going to read the fine print of any insurance carefully!!

That may be your experience, and perhaps even the majority experience here, but there are quite a few of us that aren't bums on seats that receive directions on what to do, when, or where, beyond a set of requirements and deliverables. Don't con yourself that the contract matters that much if you're indistinguishable from permies in terms of routine and delivery.

You only posted a snippet, but you'll need a full contract review to know the full extent of any issues with the contract. At that point, you may find that one of the professionals can negotiate changes for you, even if the agency is currently saying otherwise.