New contract - IR35 free

[CGMFerrier]

Hello all,

I am a Software developer and just got a new contract with a company last week. They made the offer, I accepted now comes the time to sign the contract.

One of the sections is bothering me (two actually). It states:

the Consultant is the Service Provider’s director and shareholder and exercises sole financial and
management control over the company’s structure and business operations

and the last box to tick states:

I am a director of XXX LTD (‘the Service Provider’), and am the person who shall be supplied by the Service Provider to carry out the work

I find this very confusing as the contract specifies that the Consultant is not someone in particular but a consultant belonging to my limited company (agreed beforehand with the client).
I asked to change this part, but apparently it cannot be changed because of "contractual intermediaries" issues.

I am not really familiar with this term,
Can you help me on this ?

Apologies if I posted in the wrong section of the forum, but as it is part of me checking that the contract is out of IR35, I thought it was the right place.

Thanks a lot,
All the best

[northernladuk]

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[northernladuk]

Always get our contract checked by some like QDOS. They will pick on any issues and explain them to and negotiate with the agency on your behalf.

[CGMFerrier]

Thank you for your answer
The description for this section of the forum is Financial and legal issues affecting IT contractor companies, including IR35.
That matches more my problem that For IT contractor companies to discuss business and contract opportunities.

But thank you for pointing that out

I just wanted to have a second opinion on the fact that this clause is legal, and that the fact the recruitment agency doesn't want to change it, will not make the contract inside IR-35.

Thanks !

[northernladuk]

Thank you for your answer
The description for this section of the forum is Financial and legal issues affecting IT contractor companies, including IR35.
That matches more my problem that For IT contractor companies to discuss business and contract opportunities.

But thank you for pointing that out

I just wanted to have a second opinion on the fact that this clause is legal, and that the fact the recruitment agency doesn't want to change it, will not make the contract inside IR-35.

Thanks !

Get it checked by QDOS. I very much doubt you know enough about IR35 to be able to do it yourself. I'm not picking on you. 90% of contractors don't. Misunderstanding what MoO is, not understanding unfettered RoS and so on.

IR35 Contract Review from the IR35 Experts - Qdos Contractor

[Craig@Clarity]

Purely in the context of what you've posted here and assuming you are the "consultant" they want to engage, it's saying that you have to be the sole director and a shareholder of the limited company. The limited company can't be ran by a different sole director and shareholder and for you you to be simply a worker in the limited company. If you're a one man limited company, there shouldn't be any issues with this clause you've posted. The contract maybe a standard one and you are named separately as the "consultant" on an appendix?

As many people have suggested in previous posts before, if you want to review your contract for IR35, it's best to seek professional advice. Maybe worth considering if you're new to the game.

[northernladuk]

Purely in the context of what you've posted here and assuming you are the "consultant" they want to engage, it's saying that you have to be the sole director and a shareholder of the limited company. The limited company can't be ran by a different sole director and shareholder and for you you to be simply a worker in the limited company. If you're a one man limited company, there shouldn't be any issues with this clause you've posted. The contract maybe a standard one and you are named separately as the "consultant" on an appendix?

As many people have suggested in previous posts before, if you want to review your contract for IR35, it's best to seek professional advice. Maybe worth considering if you're new to the game.

Links to back up what Craig says here.

https://www.contractoruk.com/forums/...ml#post2067792

Another one here that doesn't really answer it but shows it's not uncommon

https://www.contractoruk.com/forums/...-director.html

On the tickbox to say you are the consultant. I really don't like this BUT it doesn't mention that you will be the only person throughout the contract so, as long as you have an unfettered RoS that is written properly, you could easily argue it's courtesy to advise the name of the person supplying services from day one but this can change due to your RoS. It's not ideal but as it's worded it's arguable should there be no way of not ticking it.

[mudskipper]

Purely in the context of what you've posted here and assuming you are the "consultant" they want to engage, it's saying that you have to be the sole director and a shareholder of the limited company. The limited company can't be ran by a different sole director and shareholder and for you you to be simply a worker in the limited company. If you're a one man limited company, there shouldn't be any issues with this clause you've posted. The contract maybe a standard one and you are named separately as the "consultant" on an appendix?

Why do they need to know that? It's a B2B relationship - do you dictate the governance and shareholdings of their company? I can't see why it's any of their business.

[Craig@Clarity]

Why do they need to know that? It's a B2B relationship - do you dictate the governance and shareholdings of their company? I can't see why it's any of their business.

Agree with you on this one.....but unfortunately we all know what standard agency contracts can be like

[TheCyclingProgrammer]

I suspect the director/shareholder thing might be something to do with the MSC legislation and the agency just going for a simple blanket clause to avoid problems?