Agency won't change contract?

[Bexter]

Yes I am a newbie so I do expect to get flamed for this, however, let it be known from the start I have read a lot of the forum and also tried searching but can't find what I'm looking for, so go easy!

I am contracting for the first time and decided to take the ltd co option on the basis that I thought my contract would be outside IR35. After having a review I've been told it is inside. So I've been back to my agency and asked them to change it, to which they replied that the contract is outside IR35 therefore wont' change it.

As I really know nothing of the matter, what am I supposed to do? Can anyone help advise me in terms of is it worth arguing with my agency (whom I'm assuming are wrong, as the contract clearly suggests employment) given that I would prefer to have a good relationship with them regarding futures contracts?

Or should I give up and go for an umbrella, cause all this paperwork and hassle is really starting to stress me out before I've even started the contract!!

[SueEllen]

How can anyone give you advice if no-one knows what terms in your contract mean you fall under IR35? We are not mind readers.

[The Wikir Man]

Who told you that it was inside IR35? Did they provide any reasons for their analysis - when I get a contract reviewed by Qdos, they tell me what clauses they aren't happy with and what they should say instead.

Whoever did the contract review might be able to talk to the agency and explain what they need to do, but will probably charge. IIRC, Bauer and Cotterill will do that for you, but I've never done it.

Ultimately, the contract is not the be-all and end-all of an IR35 investigation. The actual working practices would also be taken into account - if you have an IR35 friendly contract but the working conditions do not reflect that, then it's meaningless. Conversely, having an inside IR35 indicating contract, but completely different working conditions should find you outside.

If the agency are not moving, then the only thing you can do would be to walk away from it. Only you know whether that is a good move or not - I don't know what your relationship with the agency is, or the relationship with the client, or your skills, or the market for your skills, or how badly you need the contract etc. etc.

If you have the client contact details, you could speak to them and explain the situation, apologise for not being able to take the contract but the agency are being unreasonable - essentially get your revenge in first, and see if they are willing to help your fight with the agency.

Whatever you decide, the very best of luck. And welcome to CUK.

[The Wikir Man]

Or should I give up and go for an umbrella, cause all this paperwork and hassle is really starting to stress me out before I've even started the contract!!

If you are thinking this way at this stage - is contracting really the right job for you?

[Nicely Nicely]

Or should I give up and go for an umbrella, cause all this paperwork and hassle is really starting to stress me out before I've even started the contract!!

There is almost as much paperwork and even more hassle and more risk and delays to payment when going through a brolly.

As someone currently doing it, who has had a LtdCo, I recommend sticking with the LtdCo route. And that's even if your take home £ would be the same.

As for IR35, you could join PCG for their investigation insurance then just forget about it. Or, decide you won't get caught and just forget about it. Or, decide the Tories will make it go away (yeah, right) and just forget about it. Or do nothing and keep your fingers crossed. Or wait until you have an investigation, then ask for help on here for The Things You Can Do To Make Hector Go Away Disappointed.

[Bexter]

Thank you for the constructive comments. Yes my accountant did provide details on a couple of the clauses which are not right, which I did send to my agent. However thats not really that important here as I'm not asking for advice on whether I'm inside or outside, hence why I didn't include those details.

What I really wanted to know is, is it common to have to argue with your agency? I don't understand why they are telling me they've never had any problems before....I mean, how can I be the first person that has mentioned this to them?? They claim none of the contractors have ever questioned their contract, or even asked about IR35? Am I missing something?

And yeah I am beginning to wonder if contracting is right for me. I really want the flexibility of the work, but I'm really put off by the complexity of legal arrangements, and all the decisions that have to be made in terms of umbrellas/ltd co/EBT's etc, given that I know absolutely nothing about it! Its also quite daunting to wonder if HMRC are going to come knocking on my door one day at some point down the line cause I did it wrong! this is then made worse by the masses of contradictory information and advice I have received from several people and the internet!
Apologies for the rant, but I feel like I'm going in circles!!!

[rpgpgmr1]

Agents always tell you that you are the first/only contractor ever to have a problem with their contract.
If you are unhappy with any clauses its up to you to get them changed. Its a game of who blinks first on each clause , sometimes the Agency will agree changes other times they wont. It depends if they think they can walk over you or not.
As you mentioned you are a newbie they are taking advantage of your inexperience in dealing with them
Regards IR35 if they think contract is OK tell them to give you in writing that they will indemnify you for any monetary penalties you may be subject to ( dont worry , they wont ever give you this but they will come up with a million reasons why they cannot) . When they say they cannot guarantee their contract is sound you say " thats why I need the changes". Whoever did the review should/can provide examples of suitable clauses but as mentioned it has to be combined with working practice.
You have learned lesson 1 - Agents are not your friend and you should never rely on them for any info to be "impartial" !

[The Wikir Man]

What I really wanted to know is, is it common to have to argue with your agency? I don't understand why they are telling me they've never had any problems before....I mean, how can I be the first person that has mentioned this to them?? They claim none of the contractors have ever questioned their contract, or even asked about IR35? Am I missing something?

Well, you could be the first person to question it because your accountant is wrong and isn't a lawyer familiar with writing contracts. (S)He is an accountant, so it might be best to see what a lawyer says - or people that have been through a number of reviews, which is why people are asking.

I don't for one second believe that any agency that deals with IT contractors has never had anyone ask about IR35. Unless they only take on either incredibly experienced or the incredibly naive.

[SueEllen]

Thank you for the constructive comments. Yes my accountant did provide details on a couple of the clauses which are not right, which I did send to my agent. However thats not really that important here as I'm not asking for advice on whether I'm inside or outside, hence why I didn't include those details.

Accountants, while they know the law, cannot give you legally binding advice on contract terms.

What I really wanted to know is, is it common to have to argue with your agency? I don't understand why they are telling me they've never had any problems before....I mean, how can I be the first person that has mentioned this to them?? They claim none of the contractors have ever questioned their contract, or even asked about IR35? Am I missing something?

Yes it's common to argue with your agency.

Though some agencies are good with contracts and write IR35 friendly contracts from the beginning.

And yeah I am beginning to wonder if contracting is right for me. I really want the flexibility of the work, but I'm really put off by the complexity of legal arrangements, and all the decisions that have to be made in terms of umbrellas/ltd co/EBT's etc, given that I know absolutely nothing about it!

Then start doing some reading.

All the information is out there. Look at the First Timers guide here, go to the PGC website and search the forums if you have a question as it's likely to be asked and answered before.

Its also quite daunting to wonder if HMRC are going to come knocking on my door one day at some point down the line cause I did it wrong! this is then made worse by the masses of contradictory information and advice I have received from several people and the internet!
Apologies for the rant, but I feel like I'm going in circles!!!

HMRC are unlikely to come knocking on your door in any format if:
1. You don't muck around with your VAT payments
2. You don't spend a long time in one particular contract

The reason why the advice is contradictory is because laws in the UK are not generally set in stone. Things tend to be shades of grey which is why people end up dragging things to Higher Courts or Europe to get decisions made.

[Clare@InTouch]

Thank you for the constructive comments. Yes my accountant did provide details on a couple of the clauses which are not right, which I did send to my agent. However thats not really that important here as I'm not asking for advice on whether I'm inside or outside, hence why I didn't include those details.

What I really wanted to know is, is it common to have to argue with your agency? I don't understand why they are telling me they've never had any problems before....I mean, how can I be the first person that has mentioned this to them?? They claim none of the contractors have ever questioned their contract, or even asked about IR35? Am I missing something?

And yeah I am beginning to wonder if contracting is right for me. I really want the flexibility of the work, but I'm really put off by the complexity of legal arrangements, and all the decisions that have to be made in terms of umbrellas/ltd co/EBT's etc, given that I know absolutely nothing about it! Its also quite daunting to wonder if HMRC are going to come knocking on my door one day at some point down the line cause I did it wrong! this is then made worse by the masses of contradictory information and advice I have received from several people and the internet!
Apologies for the rant, but I feel like I'm going in circles!!!

Agencies are sometimes very much under the wrong impression when it comes to IR35 - they tell contractors that the contract is IR35 proof (which there is no such thing as IR35 is determined by working conditions not the contract) and that's often the reason no one complains. Because they trust the agent.

Does your accountant genuinely think you're outside of IR35 based on your working conditions? And the contract doesn't match those conditions?

I've dealt with many agencies who absolutely would not budge on a contract, and my advice in those situations is to get a Confirmation of Agreement letter signed by your actual client. Set out the situation as you understand it and ask them to sign it. You'll need to have a good chat to your accountant and ask him to maybe summarise the points you should mention in the letter. This gives you proof to rely on in any investigation that should mean more than a standard agency contract (keep any emails you send asking for it to be changed too, so you can show you tried to negotiate it and only signed it because they refused outright to correct it).