IR35 "Bullying" - Being pushed inside IR35 by Agency and Client

[AussieDigger]

Have an interesting situation.

Just coming up on the 2 year mark on time with a client. Have had several extensions over that time and each one has involved specifying the project work to be done in that contract.

Now the client doesn't want to do this anymore and wants the contract to be 'generic' so that they can basically tell me what do to during the contract and change the project work as they see fit. This is despite the fact that the basis for entering into the contract is to engage on a specific project.

Now whilst that project can change, be cancelled, suspended, etc, it should be for the parties to agree on a change to the scope of work when that happens but it seems to make sense for the contract to be 'as specific' as possible for the benefit of all concerned. It also ensures from contract to contract that the work is clearly agreed upfront.

Problem is, the client is basically being lazy and doesn't want to be tied down like that. They don't care that the contractor could be caught inside IR35, and the agency is simply rolling with it, even though they know the downside for the contractor.

So, how to get the contract generic AND still keep it inside IR35 as to the work to be performed ? Anyone got any suggestions as to how to ensure the contract stays project-specific rather than 'BAU' and ensure my side is covered IR35 wise without ticking off the client who clearly wants things their own way or the highway ?

If an IR35 audit occurred, the client would definitely not say anything other than the work was BAU, which I believe it isn't. Its project work from my perspective as a supplier.

All suggestions welcomed.

[SueEllen]

I wouldn't do it.

There was a case not that long ago where the guy started off outside IR35 but because he changed to work like what the client wants you to do, he was caught on his remaining contracts. (You can google for the case.)

[AussieDigger]

I wouldn't do it.

There was a case not that long ago where the guy started off outside IR35 but because he changed to work like what the client wants you to do, he was caught on his remaining contracts. (You can google for the case.)

Any chance you remember the case ?

Is there any way to get around it by documenting the project work agreed at the start of the contract ?

[captainham]

Any chance you remember the case ?

Is there any way to get around it by documenting the project work agreed at the start of the contract ?

HMRC's very own 'Costas'

Chapter 10

[malvolio]

Any chance you remember the case ?

Is there any way to get around it by documenting the project work agreed at the start of the contract ?

JLJ. A slightly odd one, but relevant.

[BlasterBates]

Yes agreed with the above looks like you've now moved inside IR35. Even if you get the contract changed if they do allocate you work ad hoc you're basically inside.

Yes I too read a case similar. They ruled that the contractor was outside for 2 years and then inside after that.

[cojak]

There is not much you can do here except accept the changed conditions or decline and move on.

You are a business, not an employee (aren't you?), you have negotiated contracts - not employee rights.

[Wanderer]

I'd be cautious about letting the tax man drive my business.

My clients have suppliers who have worked for them for years and they are definitely outside IR35 - primarily because they have different people do the work at different times.

Can you subcontract out some of the work? Review the IR35 tests and see if there is anything else you can do to re-enforce your status as being in business.

You sould also consider taking out an insurance policy against an investigation and the back taxes due then just get on with running your business...

[SueEllen]

I'd be cautious about letting the tax man drive my business.

My clients have suppliers who have worked for them for years and they are definitely outside IR35 - primarily because they have different people do the work at different times.

Can you subcontract out some of the work? Review the IR35 tests and see if there is anything else you can do to re-enforce your status as being in business.

You sould also consider taking out an insurance policy against an investigation and the back taxes due then just get on with running your business...

Some poster has pointed out kindly on another thread that the t&c of one insurer mean they won't cover you if there is a chance you can't win, and as case law is against this poster at the moment insurance won't cover him.

He is better off actually using a sub or subcontracting the work out if possible, then he would be outside IR35.

[doomage]

Also, it's not illegal to be inside IR35, and if you can get them to increase your rate to cover the extra tax then it might be more palatable. At least asking them might help prove your point.

Also after 2 years your knowledge of systems etc will be very difficult / expensive to replace, so you have a big bargaining chip there, if you use it well.