IR35 - Getting a Letter from Client

[KennyG]

Bearing in mind that recent cases involving IR35 have not necessarily gone as expected, with HMRC winning a case that many expected them to lose (Dragonfly case), I wondered if someone's case would be strengthened by having a letter from the end Client to the individual stating - amongst other things - that in no way does a a contract of employment exist between the Client and any of the Ltd Co's staff and that any of Ltd Co's staff are acting in a subcontractor capacity. Also that should the Ltd Co's staff be unavailable for any reason, the Ltd Co has the right - subject to agreement with the Client - to provide a substitute individual. Maybe other issues need to be included also, such as degree of control?

Feedback on this welcomed.

[Denny]

Bearing in mind that recent cases involving IR35 have not necessarily gone as expected, with HMRC winning a case that many expected them to lose (Dragonfly case), I wondered if someone's case would be strengthened by having a letter from the end Client to the individual stating - amongst other things - that in no way does a a contract of employment exist between the Client and any of the Ltd Co's staff and that any of Ltd Co's staff are acting in a subcontractor capacity. Also that should the Ltd Co's staff be unavailable for any reason, the Ltd Co has the right - subject to agreement with the Client - to provide a substitute individual. Maybe other issues need to be included also, such as degree of control?

Feedback on this welcomed.

The contract you sign already says that there is no employment relationship between contractor and end client and this is not what ir35 is about. Also, the client would never entertain such a notion if they are already using EBs to provide a barrier between themselves and the contractor.

The working arrangments document is what you are talking about that covers the practical working arrangements on a day to day basis to reflect what has been agreed in the contract, and that is purely down to the discretion of the client whether to sign it or not. Some will and some won't.

[Chugnut]

Bearing in mind that recent cases involving IR35 have not necessarily gone as expected, ....

Ludicrously enough, I don't think this helps fight your corner.

The IB I work for are at great pains to make it clear that I am not an employee - they don't want any employment rights being claimed, etc. The agency says there is nothing in my contract (to his "IANAL" knowledge) which directly negates the contents of the one between agency and MyCo in terms of IR35, but they will not show me the contract because it is nothing to do with me.

All of this is not good enough for Hector. He would still go to the client and look at the contract and working practices. If he believes the relationship to be similar to an employee-employer relationship, he can find you inside IR35.

If that's the case, you should be able to get a refund the Employers NI for the entire contract in my mind. A temp or employee wouldn't have to pay this - so if I'm now deemed an employee, why the hell should I?

[pisces]

Ludicrously enough, I don't think this helps fight your corner.

The IB I work for are at great pains to make it clear that I am not an employee - they don't want any employment rights being claimed, etc. The agency says there is nothing in my contract (to his "IANAL" knowledge) which directly negates the contents of the one between agency and MyCo in terms of IR35, but they will not show me the contract because it is nothing to do with me.

All of this is not good enough for Hector. He would still go to the client and look at the contract and working practices. If he believes the relationship to be similar to an employee-employer relationship, he can find you inside IR35.

If that's the case, you should be able to get a refund the Employers NI for the entire contract in my mind. A temp or employee wouldn't have to pay this - so if I'm now deemed an employee, why the hell should I?

How are supposed to know if we're IR35 or not. We have to make that decision so we surely have to know.

[Qdos Contractor]

We've used a 'Confirmation of Working Arrangements' document for years and give it to all of our contractors in the hope that they will be able to get it completed and signed. Unfortunately many end clients refuse for obvious reasons, but it is highly beneficial for contractors who are able to.

PM me if you would like me to send you the document or discuss in more detail.

[Ardesco]

How are supposed to know if we're IR35 or not. We have to make that decision so we surely have to know.

That's the point, the government doesn't want us to know if we are outside it. They would rather have FUD surrounding the issue to encourage more people to pay it.

If it was clearly defined you can guarantee that 99% of contractors would be deemed outside and a huge percentage of people who "just pay it" now would not pay it at all.

The FUD brings in money to the government hence the lack of clarification.

[Chugnut]

We've used a 'Confirmation of Working Arrangements' document for years and give it to all of our contractors in the hope that they will be able to get it completed and signed. Unfortunately many end clients refuse for obvious reasons, but it is highly beneficial for contractors who are able to.

PM me if you would like me to send you the document or discuss in more detail.

So let's say a client is happy to sign this working arrangements doc. Six years later, the contract gets investigated. The guy from the client has moved on to another company, and their replacement does not think the working arrangements doc accurately reflects/reflected the reality. Hector will be talking to the replacement, not the original guy who signed the doc.

Do you void the insurance on this technicality? Who's problem and, far more importantly, potential tax bill, is it - mine or yours?

[Qdos Contractor]

So let's say a client is happy to sign this working arrangements doc. Six years later, the contract gets investigated. The guy from the client has moved on to another company, and their replacement does not think the working arrangements doc accurately reflects/reflected the reality. Hector will be talking to the replacement, not the original guy who signed the doc.

Do you void the insurance on this technicality? Who's problem and, far more importantly, potential tax bill, is it - mine or yours?

The CoA document has no bearing on any of our policies, so that scenario wouldn't occur. It's just a document that we advise people to complete, as it benefits both the contractor and Qdos as representatives.

If a new client representative did disagree with the original CoA, we would have to work around that. Exactly which route we'd take would depend on the specific case.

[Chugnut]

The CoA document has no bearing on any of our policies, so that scenario wouldn't occur. It's just a document that we advise people to complete, as it benefits both the contractor and Qdos as representatives.

If a new client representative did disagree with the original CoA, we would have to work around that. Exactly which route we'd take would depend on the specific case.

That's good to know, thanks for your reply.