Quick IR35 2.0 question

[jamesbrown]

So I'll just make sure contract has correct clauses + ensure there isn't too much (if any) D&C + PCG insurance and keep invoicing.

Another thing I don't get which is in a similar vein to the holiday/sick pay thing. If as a temporary contractor none of us have any MOO - is this simply not enough to sink any investigation regardless of other points? Or is it murkier than that.

Also having a clause obliging you to fix any errors in your own time and at your own expense (financial risk) is this also not enough on it's own?

How about financial risk + lack of MOO - how many permies would agree to those clauses going into their contracts of 'employment'?

Financial risk on its own isn't enough, but it doesn't hurt to show that (and, of course, you will by design when properly in business). Likewise, it's important to operate like a business. However, there are no "silver bullets" with IR35 from a contractual point of view because working practices are also important. The main clauses to implement and follow are the ones stated earlier.

[centurian]

Also having a clause obliging you to fix any errors in your own time and at your own expense (financial risk) is this also not enough on it's own?

Is that much different from a permie working late to sort out a cock-up they have made.

To be a full blown IR35 killer on it's own, you would need to show how you could realistically be forced to pay out hard cash because of your mistake.

Can't be bothered to re-read the judgements, but I'm pretty sure the courts have taken this line. It's a minor pointer to self employment, but only minor.

[northernladuk]

Is that much different from a permie working late to sort out a cock-up they have made.

To be a full blown IR35 killer on it's own, you would need to show how you could realistically be forced to pay out hard cash because of your mistake.

Can't be bothered to re-read the judgements, but I'm pretty sure the courts have taken this line. It's a minor pointer to self employment, but only minor.

And have the proper insurances in place in case you do make a huge mistake and get sued.

[gingerjedi]

Does anyone think they will offer a 3rd way? It seems to me they will cause a lot of financial damage to contractors and give clients big headaches if they just try and clobber more people with a sledgehammer.

Deeming people 'employed' with non of the benefits of employment and no advantages is just too blunt a tool IMO.

Can there be some middle ground or am just dreaming?

[NotAllThere]

Is that much different from a permie working late to sort out a cock-up they have made....

Very much so. A permie cannot be obliged to work late to sort out their mess. If they don't, then the worst that can happen is they can be sacked - no financial comeback whatsoever. On the other hand, if you as a contractor have a clause obliging you to make good and you don't, the client can sue you for material breach.

That's why I make darn sure I don't have such a clause in my contracts.

[centurian]

All of which sounds great from an armchair lawyers perspective. Unfortunately courts simply don't agree. Text from the Dragonfly judgement

He suffered the risks associated with being paid on invoice but during the course of each contract in my view risked little economically and had little opportunity to increase his profit. He risked the costs associated with having no sick pay... These factors point only weakly away from employment

All of these things mentioned above will help - a bit - but only a bit - and if it does go to court, don't be surprised if it counts for diddly squat.

[LisaContractorUmbrella]

I think the key words in the budget were that they will 'simplify the application' of IR35 which indicates that they are unlikely to change the legislation itself but probably make it easier to determine status - what that will entail of course is the 24 million dollar question - ideas anyone I can't help thinking that it is more likely to revolve round ROS rather than MOO because MOO has been done to death in the courts and is still about as clear as mud

Forget all this - explained here: http://www.hmrc.gov.uk/consultations...eb-mar2012.pdf

[JohnDoe]

Maybe the whole thing is just to try and scare more Ltd Company contractors into self declaring themselves inside IR35 with all the aggressiveness and horror stories.

The reality is that since introduced IR35 has hardly made any money from IR35 cases. It has been successful as a deterrent, getting a lot of contractors to declare themselves inside IR35 through scare tactics and has made a lot of money for lawyers and insurance companies with all the IR35 insurance products and the whole "protect yourself from IR35 industry" etc. I am sure they have a vested interest in keeping this going too.

[malvolio]

IR35 legislation and case law will be unaffected. All they're trying to do is focus on who to chase for being IR35 caught rather more effectively. Early indications are that they will fail that objective spectacularly, but let's see what they come up with. If you do get challeneged for IR35, all the existing contractual arrangements, insurances and the like are still there, the actual game hasn't changed at all.

[psychocandy]

Very much so. A permie cannot be obliged to work late to sort out their mess. If they don't, then the worst that can happen is they can be sacked - no financial comeback whatsoever. On the other hand, if you as a contractor have a clause obliging you to make good and you don't, the client can sue you for material breach.

That's why I make darn sure I don't have such a clause in my contracts.

Why not? Surely having this clause helps with IR35?

And get insurance to avoid the cost of being sued...