Contract help - unclear IR35 status

[johnnyk]

Hi there,

I'm currently in a permanent role but I've been contracting in the past (before the reform) and everything in my LTD is currently in place to take new work.

Recently I got in touch with a potential client (no agency or middleman) for some work to be done outside my 9-to-5 working hours, they are aware I have a full time job. They did not have an IR35 determination in place so I ended up providing an overall quote for the work assuming -and telling them- that my quote would be applicable only in case of an "Outside IR35" status determination (not interested in Inside).

I got the contract and there are bits like

1) Consultant Company is owned and controlled by Individual who is in business on their own account and wishes to be paid off-payroll

2) The Consultant Company shall, and shall procure that the Individual shall promptly give to the End Client Key Contact all such information and documentation as it may reasonably require from time to time in order for the End Client to determine whether the Engagement is or will be within the Off-payroll Working rules and is or will be Deemed Employment

3) The End Client may terminate the Engagement with immediate effect without notice (...) if at any time:
- the Engagement is determined by the End Client or, subsequently, HM Revenue & Customs to be Deemed Employment

When I read the above I kind of fell off the chair. Also, I did not receive any form of Status determination statement.

I have an active insurance with "a very famous company" and I had the contract reviewed by them: they highlighted few things in the contract and deemed it Inside IR35, but there was zero mention of what I quoted above. I replied asking for clarification about it, currently waiting for a new feedback.

I thought about picking somebody's brains here, since I really don't know if any of this is normal and I'm just being overly worried or.....?


Thank you in advance you for your help!

[eek]

What size is the potential client

If they are not small it's up to them to determine whether the work falls inside or outside IR35 which is why clause 2 is there as it takes both you and them to get things right.

This is going to be the way of things going forward so you don't have much choice beyond either accepting their terms or walking away.

[johnnyk]

Hi eek - thank you for the feedback, this is something I will try to find out.

A question though: if they were a medium-sized, would there be any ground for them to add those clauses in the contract? Or it would be "normal" only in case of small-sized?

[eek]

Hi eek - thank you for the feedback, this is something I will try to find out.

A question though: if they were a medium-sized, would there be any ground for them to add those clauses in the contract? Or it would be "normal" only in case of small-sized?

Small companies - you make the determination (but you have a problem as QDOS seem to be saying the contract is inside IR35)
Medium and big companies - they make the determination.

So small companies don't need the clause other companies will do.

[northernladuk]

Small companies - you make the determination (but you have a problem as QDOS seem to be saying the contract is inside IR35)
Medium and big companies - they make the determination.

So small companies don't need the clause other companies will do.

For now....

[eek]

For now....

That's a year or so away - so let's not create more confusion for the OP just yet.

[johnnyk]

So small companies don't need the clause other companies will do.

For small companies I make the IR35 assessment = they don't need those clauses

Assuming they are medium/large sized and have to make the determination (link) and provide an SDS for it (link), what is the reason to add in the contract

"(...) as it may reasonably require from time to time in order for the End Client to determine whether the Engagement is or will be within the Off-payroll Working rules"

while also not provinding an SDS in the meantime? Are they basically saying "oh, and btw we can also change our mind"?

Thank you

[eek]

For small companies I make the IR35 assessment = they don't need those clauses

Assuming they are medium/large sized and have to make the determination (link) and provide an SDS for it (link), what is the reason to add in the contract



while also not provinding an SDS in the meantime? Are they basically saying "oh, and btw we can also change our mind"?

Thank you

SDS determinations can be made at any point up to the client making the first payment because "how the work is being done may not be obvious until the work has begun."

[johnnyk]

got it, thank you for the feedback.. did not know at all about this

[malvolio]

got it, thank you for the feedback.. did not know at all about this

A lot of people don't, including quite a lot whose job it is to know it. The information is all out there, but many do not know it is, nor where to find it, and when you do find it it is not always particularly clear what it means! It was ever thus...