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New IT Contractor - need advice regarding contract, insurance and IR35

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    New IT Contractor - need advice regarding contract, insurance and IR35

    So I was contacted by an recruitment agency and offered a job.
    This is my first time working as a contractor, so naturally I have some questions:

    After reading a lot about IR35 it seems that the agency is either ignorant about it or pretending to be. I was given the option to work through an umbrella or set up an LTD. I have chosen the LTD route, but haven't set it up yet.
    I am being asked to sign an Agreement for Work Finding Services which also seems to serve the purpose of Opting In/Out of the Conduct of Employment Agencies and Employment Businesses Regulations 2003.
    There is an additional page of information regarding the regulations which presents the Pros & Cons of Opting Out. Among other things it states that the Opt Out "will assist in demonstrating that you operate outside IR35" and "avoid any implication that you are under the client’s control (although you may agree to be)" yet one clause in the agreement states: "unless expressly agreed otherwise be subject to the direction, supervision and control of the Hirer or End User to the extent necessary for the proper provision of the Specified Services and comply with such rules and regulations of the Hirer or End User as are relevant to external contractors"

    To me this clearly indicates agreeing to be inside IR35, yet they tell me that as I don't provide my service to the public sector then I fall outside IR35.
    1 - Should I remove that clause and then sign the agreement?

    2 - I have already met the client and as far as I am aware Opting out now is unenforceable? I know the main cons of Opting out (refuse payment to me if they are not paid and longer time restrictions to work directly), but aside from these is there anything else?

    3 - Am I supposed to also sign a separate contract detailing the services I will be providing, the pay rate and everything else related to the assignment? At what point is this signed as tomorrow is my 1st day?

    4 - They require Public Liability Insurance and I've done a few searches, but I am unsure which trade to go with - IT Consultancy or Computer Repair & Maintenance. The former is cheaper. I will be rebuilding computers.

    Thanks

    #2
    Agencies use opting out of IR35 as a way of demonstrating you are operating outside of IR35. Tosh. An IR35 determination is based on a number of factors. You are quite right that opting out has to be done before you are introduced to the client and it's now too late. Opting in gives you a number of protections and can be useful should things go belly up.

    The clause in the agreement sounds shifty but hard to tell without context around the rest of the agreement. This is where you really ought to get the contract reviewed by a solicitor - there are many out there who provide an IR35 contract review service and some will negotiate with the agency on your behalf.

    There won't usually be a separate contract but there ought to be a schedule to the contract that details the work, the rate, expected working times, etc. You don't necessarily need to sign that but sometimes a signature is requested. It should be provided at the same time as the contract as usually the contract refers to the schedule.

    You definitely need PII - if your job is more PC repair man then choose the latter. If you're doing something else then pick IT Consultant. Kingsbridge, Caunce O'Hara, Qdos and Hiscox are four I can think of off the top of my head. I've been with Caunce O'Hara for years but having never had to claim, I can't say how good they are in a crisis.

    If you turn up on site without signing a contract, it's as good as signing a contract. So, only turn up tomorrow if you're happy with the bits of paper put in front of you. That's a rookie mistake right there. If you only received the contract late last week then there's no shame in saying you're awaiting review by your solicitor and you won't go on site until you've had their feedback. If you've sat on this for over a week (many solicitors turn around reviews in 48 hours) then you only have yourself to blame.

    I'm also surprised you're being allowed on site without evidencing your insurances are in place but then some places are less anxty about that than others.
    Last edited by ladymuck; 10 September 2017, 18:36.

    Comment


      #3
      Originally posted by ladymuck View Post
      Agencies use opting out of IR35 as a way of demonstrating you are operating outside of IR35. Tosh. An IR35 determination is based on a number of factors. You are quite right that opting out has to be done before you are introduced to the client and it's now too late. Opting in gives you a number of protections and can be useful should things go belly up.

      The clause in the agreement sounds shifty but hard to tell without context around the rest of the agreement. This is where you really ought to get the contract reviewed by a solicitor - there are many out there who provide an IR35 contract review service and some will negotiate with the agency on your behalf.

      There won't usually be a separate contract but there ought to be a schedule to the contract that details the work, the rate, expected working times, etc. You don't necessarily need to sign that but sometimes a signature is requested. It should be provided at the same time as the contract as usually the contract refers to the schedule.

      You definitely need PII - if your job is more PC repair man then choose the latter. If you're doing something else then pick IT Consultant. Kingsbridge, Caunce O'Hara, Qdos and Hiscox are four I can think of off the top of my head. I've been with Caunce O'Hara for years but having never had to claim, I can't say how good they are in a crisis.

      If you turn up on site without signing a contract, it's as good as signing a contract. So, only turn up tomorrow if you're happy with the bits of paper put in front of you. That's a rookie mistake right there. If you only received the contract late last week then there's no shame in saying you're awaiting review by your solicitor and you won't go on site until you've had their feedback. If you've sat on this for over a week (many solicitors turn around reviews in 48 hours) then you only have yourself to blame.

      I'm also surprised you're being allowed on site without evidencing your insurances are in place but then some places are less anxty about that than others.
      I am a little confused - when you say contract do you refer to the agreement between me and the agency for finding work or the contract that is later drawn to put in writing the type of services I agree to provide to the end client? Or is this normally the same thing?
      Yes there is a Assignment Schedule with that information, which as you suggested states that turning up for the job means acceptance of the proposal.

      I got Public Liability Insurance today from Churchil and sent the certificate to the agency, so it it valid for tomorrow.

      Overall I am happy with the contract, it's just that bit that I quoted that I don't like. I have emailed them about it and will probably receive a response tomorrow.
      I would have attended site, but if both parties agree to remove that clause then that is fine, right?

      Comment


        #4
        Never sign any agreement with an agency until they have found you a contract. Then get that agreement plus contract reviewed.
        "You’re just a bad memory who doesn’t know when to go away" JR

        Comment


          #5
          Yep got my contract reviewed, QDOS failed it (working practices are well outside by the way), agency made changes and I got a pass. Apparently no other contractor at this major agency has had a problem with the contract...

          Comment


            #6
            Originally posted by SlipTheJab View Post
            Yep got my contract reviewed, QDOS failed it (working practices are well outside by the way), agency made changes and I got a pass.
            OK, but have the working practices changed or just what the agent is telling you in the contract? IR35 is mostly determined by reality, the contract is only a backup, and pretty much worthless if it doesn't align to reality
            Apparently no other contractor at this major agency has had a problem with the contract...
            Probably because the agent hasn't asked them, or more likely they haven't bothered to get their contracts checked. You will hear this line a lot, it is meaningless; it's only your contract that matters.

            Take a look at the Guide to Freelancing on the IPSE website - www.ipse.co.uk. Download it and study it. Then you will have a clearer idea of the complexities you are going to have to deal with. The subject specific guides over there --> on this site are also very useful reading,
            Blog? What blog...?

            Comment


              #7
              If this contract is for an assignment with a client / clients in the private sector then it is your responsibility to determine your status under IR35.

              You would determine your status by researching and understanding IR35 but also by having your contract and working practices reviewed by a professional who is able to accurately assess the risk.

              We review both the contract and the working practices as this is what HMRC would do if they looked at your status under IR35.

              There are three main factors that are assessed when looking at the status of an engagement under IR35 and these look at:

              Control: The level to which your client has a right to control you, with particular emphasis on the method by which you perform your services.

              Personal Service: Are you required to perform the services that your company is engaged to perform or could your company send another individual in you place (or subcontract elements of the service). Your company doesn't have to have actually sent someone else or subcontracted, just having a genuine right to be able to provide someone other than you is enough.

              Mutuality of Obligations: This looks at whether your client is obliged to offer you work and whether you are obliged to accept such offers. A lack of obligation on one party would suggest that there is no mutuality of obligations.

              All three of the above must be present for a contract to be inside IR35, it is not enough for only one or two to be evident.

              In the interest of clarity, if you believe that you will have a degree of autonomy in deciding how you do what you do then ask for the clause to be removed as this would muddy the waters and may make the contract look like a higher risk than it actually is.

              Comment


                #8
                Agreement for Work Finding Services
                Dring dring dring, there go the alarm bells

                Comment


                  #9
                  Originally posted by SeanT View Post
                  Dring dring dring, there go the alarm bells

                  +1


                  It is illegal for agencies to charge the contractor for finding them work, that doesn't mean that agencies won't try it on if they think that the have a naive newbie.
                  "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
                  - Voltaire/Benjamin Franklin/Anne Frank...

                  Comment


                    #10
                    Originally posted by CYPER View Post
                    2 - I have already met the client and as far as I am aware Opting out now is unenforceable?
                    That's correct, but don't expect the agency to understand that

                    Originally posted by CYPER View Post
                    3 - Am I supposed to also sign a separate contract detailing the services I will be providing, the pay rate and everything else related to the assignment? At what point is this signed as tomorrow is my 1st day?
                    Yes, you should. DO NOT GO ONTO THE CLIENT SITE WITHOUT AN AGREED, SIGNED CONTRACT.

                    Originally posted by CYPER View Post
                    4 - They require Public Liability Insurance and I've done a few searches, but I am unsure which trade to go with - IT Consultancy or Computer Repair & Maintenance. The former is cheaper. I will be rebuilding computers.
                    I'd go with computer repair and maintenance, since that sounds a bit closer to what you'll be doing. I found that with my IPSE discount, Kingsbridge were cheaper than Directline, Qdos or the others that I priced up.

                    And since you're starting out, I'd recommend downloading a copy of the excellent "Be Your Own Boss" guide to working for yourself from IPSE - link is on the homepage at http://www.ipse.co.uk
                    Best Forum Advisor 2014
                    Work in the public sector? You can read my FAQ here
                    Click here to get 15% off your first year's IPSE membership

                    Comment

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