Contract "outside IR35" compliance check

[Hiram King Of Tyre]

Whay are B&C the best?

[dmini]

Cos Im lazy - and they do the negotiations on getting clauses changed in contracts, direct with the agency! Its not them telling me, then me talking to agency then agency talking then............................................

[TheFaQQer]

I would have thought it's the other way around, if you "work" inside IR35, and your contract puts you outside - surely that means that your contract has been drafted specifically to avoid paying the correct tax ?

To me thats a deliberate offence to defraud, rather than a mis-understanding.

However, I'm not an accountant or a contract reviewer, so perhaps it's best to go to B&C and get the definitive [ if pricey ] answer from them.

I'm with you, Bluebird - if you are working inside IR35, and not paying it, then you are in trouble anyway.

If you believe that you are inside IR35, then who is going to help the defence? I think that even the PCG would give up if you said "I thought I was inside IR35, but decided to risk it and not pay it..."

[NotAllThere]

I would have thought it's the other way around, if you "work" inside IR35, and your contract puts you outside - surely that means that your contract has been drafted specifically to avoid paying the correct tax ?

To me thats a deliberate offence to defraud, rather than a mis-understanding.

It's the contract that defines the work. I.e. if the contract is outside IR35, the idea of the work being inside IR35 is close to be nonsensical. If your contract is outside IR35, you can still believe that you're subject, but you'd be pretty stupid.

To my knowledge, no IR35 case has been lost due to the AWP not matching the contract.

[Bluebird]

It's the contract that defines the work. I.e. if the contract is outside IR35, the idea of the work being inside IR35 is close to be nonsensical. If your contract is outside IR35, you can still believe that you're subject, but you'd be pretty stupid.

To my knowledge, no IR35 case has been lost due to the AWP not matching the contract.

I understand what you're saying, however the gist of these things are that the contract & the working practices need to be in agreement.

If they don't then there is a chance that you could lose, after all thats why the HMRC look at working practices as well as the contract.

[Qdos Contractor]

I certainly wouldn't be comfortable defending someone with bad actual working practices, even if their contract was faultless. The Revenue obtain massively detailed statements from the end client regarding the actual arrangements and would be quick to attack if they saw something they didn't like.

I've seen enquiries where this is the case - standard compliant agency contract but really poor working practices. It makes defending the status very difficult indeed.

We've dealt nearly a thousand IR35 enquiries and are of the opinion that the working practices have just as much, if not more of a bearing on status. That's why we'd be reasonably confident if someone had a poor contract and good working practices.

I really don't think anyone should be comfortable if they have a strong contract but aren't so sure about the working practices. It’s a dangerous game to play.

[Bluebird]

I certainly wouldn't be comfortable defending someone with bad actual working practices, even if their contract was faultless. The Revenue obtain massively detailed statements from the end client regarding the actual arrangements and would be quick to attack if they saw something they didn't like.

I've seen enquiries where this is the case - standard compliant agency contract but really poor working practices. It makes defending the status very difficult indeed.

We've dealt nearly a thousand IR35 enquiries and are of the opinion that the working practices have just as much, if not more of a bearing on status. That's why we'd be reasonably confident if someone had a poor contract and good working practices.

I really don't think anyone should be comfortable if they have a strong contract but aren't so sure about the working practices. It’s a dangerous game to play.

hey I said ask B&C not you !

[Qdos Contractor]

hey I said ask B&C not you !

Oops, sorry...

[NotAllThere]

I certainly wouldn't be comfortable defending someone with bad actual working practices, even if their contract was faultless. ...I really don't think anyone should be comfortable if they have a strong contract but aren't so sure about the working practices. It’s a dangerous game to play.

Fair enough. It's hard for me to envision working in a way that's wildly different from the contract. E.g. If I've been contracted to develop, and they ask me to do helpdesk, I won't do it under the development contract. For me the contract defines the working practices. So far, all clients I have (and have had) have and have had no problem with this. ( Yes, I did enjoy that last sentence, it was quite cathartic ).

[Qdos Contractor]

Fair enough. It's hard for me to envision working in a way that's wildly different from the contract. E.g. If I've been contracted to develop, and they ask me to do helpdesk, I won't do it under the development contract. For me the contract defines the working practices. So far, all clients I have (and have had) have and have had no problem with this. ( Yes, I did enjoy that last sentence, it was quite cathartic ).

That's understandable. Unfortunately a large amount of contracts I see have exactly the same wording and are used by countless different organisations and areas of trade. There is no way they can apply equally to everyone.

A lot of agents tell new contractors that a compliant written contract means they are safe, which is annoying.