Inside IR35 but look closer...

[WellingtonBoot]

Hi,

First post here and hoping this is worth sharing.

I am in the process of completing the paperwork on an assignment which is deemed inside IR35. I've been looking at all the paperwork between me and the umbrella (contact of employment) and the contract between the umbrella and the agency (which I also have to sign). There are some things which I am rather interested in when it comes to the IR35 determination and would be interested in views/comment.

In the agreement between the Agency ("The Company") and the Umbrella ("The Supplier") there are some clauses which I wanted to highlight:

"at the Company's or the Client's request remedy in the Supplier/Consultant's own time and at the Supplier's own expense any Substandard Outcome of the Services and where necessary, this shall include re-performing the Services. "Substandard Outcome" shall mean any result, element, stage or product of the Services that the Client or the Company reasonably deems as not meeting the standard required under clause 2.1(a) or and/or any Service specifications set out in the Assignment Schedule;"

Seems that the Umbrella is responsible for any liability for substandard / defective work. Presumably the umbrella will simply make me responsible.. although there is no such clause in contract of employment that i have with them. Where would I stand in this case?

Second:

"The Supplier may from time to time and shall as soon as possible after being required by the Company so to do, without prejudice to the other provisions of this Agreement, offer a suitable substitute consultant"

- reading this carefully I understand this to mean that the Supplier may from time to time offer a suitable substitute consultant.. and in the case where the Company requires it to do so then they should offer the substitute as soon as possible. Is this a reasonable interpretation?

It goes on to say that the Company may reject the substitute if they deem them to be "not wholly suitable (whether by reason of skills, experience, training, qualifications, authorisations or otherwise)" but this is pretty self evident surely?

Finally

"this Agreement is not an exclusive arrangement and (subject to clauses 2.1(f) and (if applicable) 6) nothing in this Agreement shall prevent the Supplier or the Consultant from engaging in other services for any third party;"

Seems to me that my contract of employment is the main thing that puts me inside IR35.. It's almost a reverse IR35 - a disguised business.. but for the intermediary I would be effectively in business on my own account... Any thoughts on this?

I would be most interested in any feedback on the first point.. would I be obliged to put right at my own cost any substandard / defective work?

[eek]

Probably because most umbrellas believe their core customer is the agency and not you (you just pay them for the privilege of working).

[WTFH]

...
In the agreement between the Agency ("The Company") and the Umbrella ("The Supplier") there are some clauses which I wanted to highlight:

"at the Company's or the Client's request remedy in the Supplier/Consultant's own time and at the Supplier's own expense any Substandard Outcome of the Services and where necessary, this shall include re-performing the Services. "Substandard Outcome" shall mean any result, element, stage or product of the Services that the Client or the Company reasonably deems as not meeting the standard required under clause 2.1(a) or and/or any Service specifications set out in the Assignment Schedule;"

Seems that the Umbrella is responsible for any liability for substandard / defective work. Presumably the umbrella will simply make me responsible.. although there is no such clause in contract of employment that i have with them. Where would I stand in this case?
...
I would be most interested in any feedback on the first point.. would I be obliged to put right at my own cost any substandard / defective work?

It's really hard to say, because you've selectively quoted from one contract and not shown anything of the other one. The fact that it says Supplier/Consultant means yes, if you mess up, you fix it, which would be expected.

If you're looking for detailed/legal advice on the contracts, you'd need to speak to someone who will review both of them in full.

As for your final point, that's not the opposite of IR35, that is the end client saying that they are not preventing you from coming to work for them through another agency, even though your contract with the agency may have a 6 month exclusion clause.

[b0redom]

They can put anything they like in the contract. I had loads of similar clauses in my last inside one. In fact it was so far outside according to the contract that I actually asked if they'd sent me to correct one. The answer just came back, "Yes it's the right contract. All our contractors are inside IR35."

[northernladuk]

Not sure what your question is here. Are you suggesting your contract should be outside based on the few quotes you've given us? The client will have gone through the SDS check list and some of the questions they answered put you inside. It's your, or how the customer expects, your working conditions are. The risk is on them so they dictate the status. The contract is irrelevant really. Even in the good old days we always said working practices trump contracts. If it said you could send a sub in the contract but the client said nah not really then the contract is blown and you are inside.

Two very simple ones, if you can't send a sub and the client expects you to work on whatever then you are inside, regardless of the contract. Either one of those is enough to put you inside let alone both.

It is also possible the working practices and contractor are outside but the client just doesn't want the risk so inside you go. You could challenge that but you've got zero chance of changing it.