Need contract revue

**StoneLaughter** · 2 August 2006, 21:26

Even if you do get a rubber stamp from a reviewer the only effective test, from what I've read around and about, is to have a decision by the IR tested in court... just because a reviewer says it's fine doesn't mean that IR will agree unfortunately.

I've been reading A LOT about this today, from various sources, and I'm wondering if it's worth bothering with a review at all, as the result of it guarantees nothing; it merely gives you an idea of the percentages game. Seems to me that the law's badly written and needs a really serious review; the IR are only winning about 5% of the cases - which to me means that there are HUGE issues with interpretation. Laws should be as close to "single interpretation only" as possible AFAIC.

**XLMonkey** · 2 August 2006, 22:42

Bauer and Cottrell get regular recommendations around here, so suggest you try them.

However....your situation sounds very like the one that the IR35 legislation was originally drafted to catch -- i.e. where a full time employee leaves employment on a Friday and starts work as a "contractor", doing essentially the same work, on a Monday. Just having an IR35 friendly contract doesn't mean that you are safe. You need to bear in mind that the IR35 assessment is based on actual working conditions, rather than what is written in your contract.

**malvolio** · 3 August 2006, 08:18

Originally posted by StoneLaughter

Even if you do get a rubber stamp from a reviewer the only effective test, from what I've read around and about, is to have a decision by the IR tested in court... just because a reviewer says it's fine doesn't mean that IR will agree unfortunately.

I've been reading A LOT about this today, from various sources, and I'm wondering if it's worth bothering with a review at all, as the result of it guarantees nothing; it merely gives you an idea of the percentages game. Seems to me that the law's badly written and needs a really serious review; the IR are only winning about 5% of the cases - which to me means that there are HUGE issues with interpretation. Laws should be as close to "single interpretation only" as possible AFAIC.

Thank you, I've got coffee all over the keyboard now... Two days ago you knew nothing, now you're an expert.

Reviews are only indicative, of course, although negotiating out some bad clauses does mean you have tried to assess your position regarding IR35 status and can't, by Hector's own rules, be penalised if you are found to be wrong. The penalty is up to 100% of the unpaid tax, so reviews are worth thinking about for that reason alone.

However, it is also fair to point out that an investigation will cost you an average £15k in fees and take three years of worry: can't do much about the latter, but you should insure for the former, and that also means having an assessment of your status from an expert.

It might not look like it's a worthwhile exercise to a newbie, but it is. We don't do it for fun.

**lawspeed** · 3 August 2006, 08:24

Survive35 Tax-Safe Insurance

A review in itself will provide the reviewer's opinion, usually with detailed notes of where problems lie in the contract terms and also with regard to your on-the-ground working practices. You can go a step further if you want absolute peace of mind by taking out some form of tax-loss cover if the review results in a successful outcome. For example we have arrangements with insurers Abbey Tax Protection (who also provide the professional fees insurance offered to PCG members):

http://www.lawspeed.com/providers/pr...insurance.aspx

This underwrites the actual additional IR35 tax, NIC's, interest and penalties on engagements that we have reviewed and approved as outside IR35. We usually turn around reviews within 2-3 working days, or earlier if our workload permits.

Let me know if you have any questions.

**Millwall** · 3 August 2006, 08:51

Originally posted by XLMonkey

Bauer and Cottrell get regular recommendations around here, so suggest you try them.

However....your situation sounds very like the one that the IR35 legislation was originally drafted to catch -- i.e. where a full time employee leaves employment on a Friday and starts work as a "contractor", doing essentially the same work, on a Monday. Just having an IR35 friendly contract doesn't mean that you are safe. You need to bear in mind that the IR35 assessment is based on actual working conditions, rather than what is written in your contract.

Actually the new contract position is very different. I will be working for the software vendor at multiple locations and institutions.

**StoneLaughter** · 3 August 2006, 09:25

Originally posted by malvolio

Thank you, I've got coffee all over the keyboard now... Two days ago you knew nothing, now you're an expert.

Apologies I didn't mean to come across that way; I've simply been reading an awful lot the last few days and this was the impression I got from what I've read. I understand what you're saying about the reviews, and you do make a lot of sense. Maybe the impression I was given from the 30 or 40 sites I've taken information from, was more down to the general cynicism I've found in Contractors than down to an accurate reflection of the facts?

I'm trying here guys I really am; I don't WANT to have scorn poured on me simply because I don't know as much as someone who's been doing it 40 years, because it's REASONABLE to expect someone new to the game to know very little. I'm trying to find out as much as I can, but the reading is constantly coloured by information posted by seemingly bitter, cynical tossers who can find nothing better to do than to paint as black a picture for me as possible. It makes me wonder, if that's what contracting does to you, whether I want to go there - or is that the idea? To put me off from going contracting as I might one day be competing for a contract with you?

**Pondlife** · 3 August 2006, 09:35

Tom, the information/advise/opinions you get from a free to use forum is worth exactly what you paid for it.

For every post on here someone has a conflicting opinion especially around brolly Vs Ltd, Opting in/out of agency regs etc

You seem to be keen to do your own reseach which can only be a good thing but ultimately you may have to pay for proffesional advise i.e. IR35 contract reviews, Tax advise from an accountant.

Stick with it and keep reading the threads - Just get used to filtering the BS.

**The Lone Gunman** · 3 August 2006, 09:49

Tom: We might be laughing, but I for one am impressed. You have read and understood which is good (it is what we told you to do when taking the piss in your first post). Having the balls to post 2 days after "i'm a newbie" is impressive.

In some ways you are correct in that the IR may take a different view, but and its a big BUT (not that kind Xog), on your tax form you are required to tell the IR if you may be inside IR35. Not telling them can get you into all sorts of lumber.
Just thinking you are outside, particularly if you can not eloquently argue the point, is not good enough.
If you have had a positive review (outside IR35) from a recognised professional then you can honestly claim to be outside.

A number of the reviewers offer insurance packages against a negative IR review too. I understand the PCG package is good. I think the package from Shout99 also offers to cover penalties.

**malvolio** · 3 August 2006, 09:57

Ah but, the other thing to remember is that if you do go contract, you're on your own and you make your own decisions. You're getting advise from three places: professional advisers and informed publications like the PCG website, sales advise from purveyors of various managed services and apparently cynical advise from people who have been doing it for many years and have the scars.

The first group can be trusted, the second can't, the third can.

Snag is the third group are also likely to come over a bit harder than they really are becuase they want you to think carefully about what you are doing and to highlight the myriad places you can fall over and get hurt. I'll freely admit I'm a bit harsh, but that's just me - then again, you will get a lot worse treatment out there in the real world, so you may as well practice here where it doesn't really matter that much.

Need contract revue