Inside IR35 via Umbrella - Conduct of Employment Agencies Regulations 2003 opt-out

[CatBlack]

I'm starting a new gig soon, inside IR35 via umbrella (needs must).

I've been "invited" by the umbrella company to sign the standard opt-out to to these regulations. My understanding has always been that the main purpose of this opt-out was to strengthen my "I'm not under the control of the end client" arguments for IR35 purposes. As this engagement is inside IR35, I can't really see how it would benefit me to opt out.

Am I correct? And what would be the likely repercussions of politely declining to opt out?

[Andy Hallett]

It is of no benefit for you to Opt-out.

[CatBlack]

It is of no benefit for you to Opt-out.

Thought so. Thanks.

[eek]

I'm starting a new gig soon, inside IR35 via umbrella (needs must).

I've been "invited" by the umbrella company to sign the standard opt-out to to these regulations. My understanding has always been that the main purpose of this opt-out was to strengthen my "I'm not under the control of the end client" arguments for IR35 purposes. As this engagement is inside IR35, I can't really see how it would benefit me to opt out.

Am I correct? And what would be the likely repercussions of politely declining to opt out?

The repercussions could be that the agency pulls the contract - it's unlikely but it's possible.

[northernladuk]

The repercussions could be that the agency pulls the contract - it's unlikely but it's possible.

This. Plenty of agencies won't deal with Opt In because of the extra paperwork and responsibilities on their side. I believe they are allowed to do this although Cojak and SueEllen got conflicting advice from BiS and someone else to whether it's discriminatory or something like that. But at the end of the day if the agent will only accept Opt In there is nothing you can do about it.

[Andy Hallett]

This. Plenty of agencies won't deal with Opt In because of the extra paperwork and responsibilities on their side. I believe they are allowed to do this although Cojak and SueEllen got conflicting advice from BiS and someone else to whether it's discriminatory or something like that. But at the end of the day if the agent will only accept Opt In there is nothing you can do about it.

*Opt Out

I'd be surprised if any agents died in a ditch for this.

[ladymuck]

I did have one agent tell me that opting in was a red flag from an IR35 perspective. I asked them to demonstrate how an opted in contract would fall foul of MOO, SDC and RoS and for some reason they couldn't.

[northernladuk]

*Opt Out

I'd be surprised if any agents died in a ditch for this.

Good spot. We've had a couple of threads about agents refusing to Opt in, one of which had Cojak and SueEllen asking BiS. Could the contractor have pushed it harder? We don't know but it sounded pretty firm.

[malvolio]

You can't Opt In, only Opt Out... You're in by default.

And experience has shown that most agencies never managd the Opt Out properly, meaning most contractors remain inside the regs anyway.

But until it goes to court and someone gets something as a result of an improper application of the process, its not going to matter a damn anyway.

And the Opt out was negotiated on behalf of small business owners who use independent sub-contractors where the regs put an unnecessary burden on the engagement. It was never meant to allow agencies to ignore a chunk of their responsibilities,; that is just them being selective in their interpretation of the law to save them some effort. And money...

[CatBlack]

You can't Opt In, only Opt Out... You're in by default.

Indeed.

I declined to sign and asked the agency to remove the opt-out from the contract. A couple of hours later I had a call from someone in their legal team, (politely) asking what my reasons were for opting in. I told her I didn't need a reason to opt in; I was already "in", I would need a reason to opt out, and I didn't have one.

There followed a bit of huffing and puffing from her about how this made things a bit more difficult for them, but to be fair she didn't make a fuss about it and said she'd send me a new contract. Although when I asked whether the new contract would be just the old contract with the opt-out removed, she said no there were some differences. I guess we'll see.