IR35 clause in contract

[Eirikur]

Recently started a new contract which was deemed outside of IR 35, but having started a few weeks ago, I have never before been so controlled and directed as I am now. So I started reading my contract again and found this clause. I'm trying to understand what it exactly means. Is this a clawback clause should I start paying taxes retrospectively or is it only from the moment they re-assess and determine that I'm Inside. (company refers to my Ltd company)

4. If it is determined by the Client, that the Assignment falls within scope of IR35 any payment due to the Company pursuant
to clause 4.1 shall be payable directly by the Employment Business or by the third party nominated by the Employment
Business subject to the third party or Employment Business deducting all applicable taxes (including any national insurance
contributions) required by law or any other fees charged by the third party or Employment Business. For the avoidance of
doubt, if requested, the Company shall be required to enter into a separate contract with the third party in relation to payment,
deduction of applicable taxes and other fees. The Employment Business shall not be liable for any losses whatsoever and
howsoever arising from IR35.

[Fred Bloggs]

Well, it talks about the client deciding. First thing I would want to be very clear on, has the client any inclination towards changing the gig from outside to inside?

From the very brief details given, it seems to me that you think you're already defacto inside. So it wouldn't matter what the contract said. Facts trump the contract wording.

And yes, it seems to me you're 100% on the hook for ernic, eenic and paye.

[cojak]

It could be retrospective, but HMRC will say it isn’t.

[jamesbrown]

The responsibility for a deemed payment arises from the moment that the working practices are inside. Split judgements are not impossible, but they are rare, so the chances are that any inside status began from the very beginning of the contract and the client's opinion about this will carry a lot of weight. For a split judgement to arise, there would need to be a substantive change in working practices, one way or the other, and you've already said that the current working practices feel as though they're inside, so they probably are (especially D&C, which is very important).

Regarding liability, I would be focusing on the last sentence, which states "The Employment Business shall not be liable for any losses whatsoever and howsoever arising from IR35." I think that gives you their opinion on the matter.

tl;dr. A risk, yes.

[hugebrain]

"The Employment Business shall not be liable for any losses whatsoever and howsoever arising from IR35." I think that gives you their opinion on the matter.

tl;dr. A risk, yes.

Is there any definition of loss? What if, for example, they make slightly lower profit if they pay the taxes they owe?

What if you terminate the contract and leave for an outside IR35 role? That sounds like they would lose profits arising from IR35. It’s all a bit iffy,

Hopefully it wouldn’t stand up in court. We could end up like the foreign nurses pursued for thousands for leaving a rubbish contract.