Conduct Regulations 2003: opt in/opt out?

[SueEllen]

Q: What are disadvantages of opting in to the regulations? Or what are the perceived benefits of opting out?

A: Opting out gives greater flexibility. You do not need to ensure that the agency has sufficient information under the Regulations about your skills to place you in the first place which can be a cumbersome and time consuming process.

Source - Opt in, opt out? What the employment agency regulations are all about :: Contractor UK

Since most financial, defence, government and educational clients require this information anyway that is irrelevant.

Also where the client deals with children, the disabled or other vulnerable people you can't opt-out.

[SueEllen]

The regulations only apply if the contractor works under the control of the client. That's not my understanding, thats black and white.

If you're under the control of the client then opt-in and get the 'protection'. I would imagine that should an IR35 investigation be launched you won't claim to be under the control of the client..

I'm not confusing anything, it's very straight forward.

As the regulations don't apply you can't opt-out of them as you aren't opted-in, in the first place.

[Agent]

As the regulations don't apply you can't opt-out of them as you aren't opted-in, in the first place.

You're opted in automatically, it's not something you choose to do. Unles you opt-out, you're in.

Come IR35 investigation time, guess what... HMRC say "we noticed that you're opted-in to the agency regulations" which states that you're under direct control of your employer....

Be smart, opt out. The regs were never meant for highly skilled IT contractors, they were made workers that are under the control of their employer and could potentially be exploited.

[SueEllen]

You're opted in automatically, it's not something you choose to do. Unles you opt-out, you're in.


Come IR35 investigation time, guess what... HMRC say "we noticed that you're opted-in to the agency regulations" which states that you're under direct control of your employer....

Be smart, opt out. The regs were never meant for highly skilled IT contractors, they were made workers that are under the control of their employer and could potentially be exploited.

You do talk rot - I would say you are DA's sockie but you are far too stupid.

HMRC aren't interested in your opt-in status and neither are judges, if HMRC think they can test your contract in court.

Though HMRC have a tendency to drop cases long before that where the contractor has IR35 insurance and a contract with deliverables for some reason...

[TheCyclingProgrammer]

Come IR35 investigation time, guess what... HMRC say "we noticed that you're opted-in to the agency regulations" which states that you're under direct control of your employer....

Being opted in is not evidence of actually being under control. HMRC are going to have to do better than simply pointing at your opt-in status.

Furthermore, being under some form of control is not in itself enough to fall inside IR35 - so long as you can demonstrate you were not under supervision OR direction, had a genuine right of substitution or there was no mutuality of obligation then you are not caught by IR35.

[Agent]

Being opted in is not evidence of actually being under control. HMRC are going to have to do better than simply pointing at your opt-in status.

Furthermore, being under some form of control is not in itself enough to fall inside IR35 - so long as you can demonstrate you were not under supervision OR direction, had a genuine right of substitution or there was no mutuality of obligation then you are not caught by IR35.

My point is that you only get the benefits of opt-in if you are under control or your employer. So if you're not under control you don't get the benefits of opting in. You're opting in to something that won't apply, it's pointless.

[Agent]

You do talk rot - I would say you are DA's sockie but you are far too stupid.

HMRC aren't interested in your opt-in status and neither are judges, if HMRC think they can test your contract in court.

Though HMRC have a tendency to drop cases long before that where the contractor has IR35 insurance and a contract with deliverables for some reason...

And this is based on what evidence? How many IR35 investigations have you been involved in? I've been involved in 3 and it matters, not soley but it's all part of building a case.

"There is also an argument that if you do not opt out this may cause issues with regard to IR35 because the Regulations only apply to a worker who is under the “control” of the end user and by not opting out the contractor is essentially saying that they are under control. Control is an indication of employment, a test for which underpins an IR35 assessment. Despite this, in my experience, opting out of the Regulations is agency driven, and in some cases a requirement so that the agencies can avoid the more problematic issues the Regulations cause. Make sure you read Part 2 of these FAQs for more detail on opting-in/out and IR35. "

The above is written by David Buckle, head of the employment practice at Cubism Law and is on this site - but I suppose as you know better than this SueEllen. I'm saying that the above is fact, i'm saying there's an argument that it may be used against you in an IR35 investigation, why run the risk??

Seriously, you gotta stop listening to the drivel posted by some of the members and look at what the professional say, especially those professionals that wrote for this very site.

[malvolio]

The regulations only apply if the contractor works under the control of the client. That's not my understanding, thats black and white.

So your contracts and the Ts&Cs you have sold to the client are stating explicitly that the worker is not under the control of the client then...?

If you're under the control of the client then opt-in and get the 'protection'. I would imagine that should an IR35 investigation be launched you won't claim to be under the control of the client..

Except your IR35 status is not affected by whether or not you are opted out. Agreed control is a major indicator however and we are invariably subject to an unwanted degree of control by the contracts we are forced to use

I'm not confusing anything, it's very straight forward.

I know it is; I was around when this was all being discussed and the opt out justified. The fact remains that the regulations are not and were not intended to apply to independent freelance workers of any kind but Brown's treasury mandarins were not smart enough to understand the difference between an agency temp and a freelance despite it being made abundantly clear at the time: all they saw was the word "agency". Everything else flows from that one significant cock up.

And don't kid us kidders: agencies vote for the opt out because it saves them significant effort on every contract they issue.

[Agent]

So your contracts and the Ts&Cs you have sold to the client are stating explicitly that the worker is not under the control of the client then...?


Except your IR35 status is not affected by whether or not you are opted out. Agreed control is a major indicator however and we are invariably subject to an unwanted degree of control by the contracts we are forced to use

I know it is; I was around when this was all being discussed and the opt out justified. The fact remains that the regulations are not and were not intended to apply to independent freelance workers of any kind but Brown's treasury mandarins were not smart enough to understand the difference between an agency temp and a freelance despite it being made abundantly clear at the time: all they saw was the word "agency". Everything else flows from that one significant cock up.

And don't kid us kidders: agencies vote for the opt out because it saves them significant effort on every contract they issue.

Absolutely our contracts say that the contractor is not under direct supervision and control. I'm amazed if you'd take a contract that didn't specify this.

[TheCyclingProgrammer]

My point is that you only get the benefits of opt-in if you are under control or your employer. So if you're not under control you don't get the benefits of opting in. You're opting in to something that won't apply, it's pointless.

You don't opt in to anything. It's the default position.

If it doesn't apply if you're not under any control, then why the need to opt out in the first place?