Ltd Company, opted-out, references

[Spikeh]

Hi there,

This question is specifically related to opting-out and either my ignorance, or that or the agency I'm working with. I've not been able to find any information anywhere relating to this specific situation, so I thought a post would be best.

I've been offered a very good new contract, opted-out and provided my Ltd company / VAT details to the agent as per usual. The first issue is that the contract was headlined "Contract for Ltd company opted-out of the regulations (Outside of IR35)". As far as I'm aware, opting-in and opting-out has little to no bearing on IR35? I mentioned this to the agent, who pretty much ignored me; i.e. they've been trained to say that the contract puts the contractor outside of IR35 and have no other knowledge surrounding it so can't really argue.

Additionally within the contract, there is a clause stating that I should be opted out and any future sub-contractors I may use should be opted out. Again, as far as I'm aware this is an illegal clause - opting-in / out cannot be declared inside the contract?

My main issue, however, is what the agent is requesting now I'm opted out. They want some ID (passport or driving license) and two references. Now... I've read through the regulations quite a few times over the past few years, and I've just refreshed my memory recently... as far as I can tell, these pieces of information are ONLY required when you are opted-in; and it makes sense - if you have a Ltd company, ID is irrelevant, and references are unimportant as it's the company that is liable, not the individual consultant that is assigned to the project with the client.

The reason I bring this up is, of course, IR35. If I am seen to be providing information to an Agent that suggests I may be seen as am employee (such as ID and references), I could be caught within it. I make it very clear when I start with a client that I am my own responsibility - I usually set my own hours (and try to set the location to home as often as possible), I have plenty of Ltd company insurance, my car is insured to be driven for business purposes etc. The only thing I'm worried about here is that the agency doesn't see me as a company, they see me as a temporary worker (even though that it's very clear in the contract that I am a Ltd company providing a service to a client).

As the regulations don't apply when you're opted-out, providing this information should be optional. Additionally, the agent has stated that in order to pay me (bearing in mind the contract is very sound otherwise) they need two references. There is nothing within the contract about references, this is just the agent telling me that their payrol system requires the references to pay me properly. Although I have many gleaming references, I'm reluctant to provide them as all agencies are prone to delivering the old sales pitch to my older clients (lots of which I have and will be working for again).

Thoughts? Am I within my rights to refuse to provide references or ID when I opt-out? Would providing references / ID affect my IR35 status? Am I (as always) being too analytical and creating potential strain on my relationship with the agent, or am I doing the right thing by fighting my corner? I work "by the book" in every aspect of the few businesses I run, and now I'm in full-flow with contracting, I would like to know where I stand.

[diesel]

When i had my last contract which was opted out, agent requested 2 references and passport/ID copy. Which at the time i duly supplied, and this passed all the Qdos IR35 reviews.

My latest contract states quite clearly that the contract is based on the agreement on being Opted out. Agency have not requested any references, but have requested i sign authorisation letters so they can contact my University to verify my qualifications. Although agency requested a copy of my passport photo - i did not supply this, and they made issue when all signed documents were issued. Also in the box for "NI No" i wrote "N/A".

You are correct if you are Opted In i think the agency need to make more formal checks and references, but to be honest is just a reference they seek. Just ask some colleagues you get on well at previous clients who can honour. But i do wonder if you can supply the references of 2 previous agents, as strictly speaking your contracts are with agents not the end clients. I dont think supplying references will affect IR35 as its not an indication of client control, just client confirming you are suitable to provide the service requested.

[cojak]

My latest contract states quite clearly that the contract is based on the agreement on being Opted out.

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I didn't think that was legal.

[craig1]

I didn't think that was legal.

Regulation 32(13) provides that an employment agency or employment business may not make the provision of its work-finding services conditional upon either a limited company or the worker to be supplied giving notice to opt out of the Regulations

Linky (PDF), page 34

[craig1]

On the subject itself though: I operate 50/50 contracting/consultancy and, when consulting direct, it's only when I'm going in directly on an independent recommendation from a contact that I don't have to provide references in some form or another. I have a couple of standing references from former clients that I provide with contact details for those things. I'd be quite suspicious if a client engaged me to do some consultancy without some proof of my past history.

On the contracting side, it's usually about 1 in 3 contracts where I have to give a reference and even then I withhold it until I get a firm offer conditional on references.

Would you just take someone from the street to do some important work for you based on what could be made-up drivel on a CV? I certainly wouldn't if operating my own large company; no references, no work.