Agency contracts in light of IR35 defeat

[BolshieBastard]

AIUI it simply upheld the original ruling and so has not changed existing case law. ICBW

It also did not discuss MOO which was not part of the appeal but arguably should have been. The challenges were on RoS - clearly unsupportable in this case - and D&C where things got a little confused (to say the least) partly because of poor wording in the original contract.

Nevertheless, this case like all IR35 cases is decided on interpretation of extremely vague guidance, using criteria not originally established for that purpose and by creating notional contracts that can, as here, contradict the actual contracts signed by all parties in good faith. IR35 remains unworkable and unjustifiable.

You really are clueless, aren't you?

[Fred Bloggs]

In other words, however secure you may be in being outside IR35 you will still rely on end client to endorse it. That's one hell of a risk, and one that will nearly always work in HMRC's favour.

Correct. To make it worse when you're investigated the client rep could be someone who never knew you, never worked with you, wasn't even at the client company at the time and probably not even at the same site. Basically, if a client rep stands up in court years later and says "We wouldn't accept the Ltd Co/Agency contract as real", well, then you're stuffed and mounted. It's very scary and very high risk. IR35 is now, more than ever, a lottery.

[malvolio]

You really are clueless, aren't you?

Yes, and you're a fat slob with BO...

Which bit of "I could be wrong" do you not understand? Which bit of the rest of the post is demonstrably wrong? It's only an opinion, if it spoils your world view then either argue against it or butt out. I could care less which option you choose.

[richy]

Our contracts are not worth the paper they are written on, it is the real working practice that matters. Dragonfly reinforces this. Sometimes I think we would be better with verbal agreements only. I intend to try and discuss terms at interview stage from now on and hopefully get written confirmation.

Your contract allows for 2 things.
1. You can show the tax man due diligence by having it checked so when you sign your tax form as outside IR35 you were sure you were correct. This means the tax man should not hit you for penalties.
2. You can sue the arse off the agent for misrepresentation should your contract turn out to be a sham.

Well if it costs me 8% to insert an agent between me and the client to get the IR35 compliant contract.. that is about 7000 pounds.. makes me wonder if i should have just put up with client's non IR35 contract.. especially as most of the money is paid to consultant on PAYE..

[The Lone Gunman]

Well if it costs me 8% to insert an agent between me and the client to get the IR35 compliant contract.. that is about 7000 pounds.. makes me wonder if i should have just put up with client's non IR35 contract.. especially as most of the money is paid to consultant on PAYE..

Why are you inserting an agent? Working direct is better.

[richy]

Why are you inserting an agent? Working direct is better.

I'd love to work direct. Client refused my IR35 compliant contract. Client insisted on their own contract which fails IR35 (my insurer, QDos, checked it for me)

So agency I inserted gave me an IR35 compliant contract to sign (checked by QDos). Had I signed the client's IR35 fail contract i wouldn't have lost 7k in the agency cut.. but then I'm clearer on the IR35 front as the contract I have from the inserted agency is IR35 compliant..

However.. i'm pretty sure the agency signed the client's IR35 fail contract... frustrating that its not them that will have to pay if there is ever an investigation.

Thanks, rich

[The Lone Gunman]

I'd love to work direct. Client refused my IR35 compliant contract. Client insisted on their own contract which fails IR35 (my insurer, QDos, checked it for me)

So agency I inserted gave me an IR35 compliant contract to sign (checked by QDos). Had I signed the client's IR35 fail contract i wouldn't have lost 7k in the agency cut.. but then I'm clearer on the IR35 front as the contract I have from the inserted agency is IR35 compliant..

However.. i'm pretty sure the agency signed the client's IR35 fail contract... frustrating that its not them that will have to pay if there is ever an investigation.

Thanks, rich

If the client would not sign an IR35 contract with you then I am sure they will not have changed their mind with an agent. I am also sure that the working practices will be IR35 caught. So you have just paid an agent for nothing. Would your IR35 bill have been 7K?
You should have taken the direct at a rate to compensate or walked away.

Write to your agent and ask them to confirm that your contract is valid and back to back with the client and that they have agreed all terms and working practices with the client.
Also look into a "statement of intent" on the usual web sites and see if you can get your client to sign one.

This seems a clear case of a client using a contractor when they want a permie but dont want to have to hassle of employing someone.