Contract indemnifies agency (at my expense) against HMRC enquiries

[zerosum]

Previous contracts have stipulated that the supplier is responsible for any PAYE and NICs that arise for supplier staff. Fine.

New contract has no less than eight paragraphs about this issue.

Supplier is responsible.

Supplier indemnifies agency against any future claims from HMRC (because the supplier mis-paid).

Supplier agrees to provide assistance/paperwork to agency to help with any HMRC enquiries.

Supplier agrees to indemnify agency against any costs relating to dealing with HMRC enquiries (!)

Because of time pressures (contract sent late on Friday which I scanned, on-site meeting expected first thing next week) I suggested reducing the notice period so that the contract could be replaced if necessary, although I haven't signed yet. But now that I'm reading it through, this clause seems to me unacceptable. Even the briefest engagement could render me liable for indemnifying them for HMRC enquiries.

I have TLC35, does anyone know if this would cover enquiries against other parties?

[ShandyDrinker]

Run away very quickly?

In seriousness I while I'm happy to be responsible for PAYE/NICs of my own company per the majority of existing contracts, there is no way in hell I'm going to indemnify the agency on behalf of my company against any future investigations by HMRC. For me that kind of clause would be a deal breaker.

From memory and also scan reading my TLC35 policy documents, I don't believe it covers enquiries such as you are asking about.

[zerosum]

Run away very quickly?

In seriousness I while I'm happy to be responsible for PAYE/NICs of my own company per the majority of existing contracts, there is no way in hell I'm going to indemnify the agency on behalf of my company against any future investigations by HMRC. For me that kind of clause would be a deal breaker.

From memory and also scan reading my TLC35 policy documents, I don't believe it covers enquiries such as you are asking about.

Indeed. Called QDOS this morning and confirmed.

This is doubly not my responsibility as the likelihood of the agency being investigated is a function of the success of the agency. As such, they should make a decision about what kind of insurance they need to get.

Also, they wanted to be able to recoup any expenses involved in answering HMRC queries, and for me to be on hand to provide documentation. Also not covered by TLC35 or accountant.

[zerosum]

So it turns out that it's really to cover the scenario where I close my company and HMRC then go after the agency for debt collection because they determine that actually, a contract was inside IR35 (although the clause also covers them for more than this).

I see the point -- but still find it unacceptable.

Agency suggested I sign the contract (as it will take a couple of days for legal review and revision, which would overrun the start date) and send an email with a read receipt stating explicitly which parts of the relevant clause I reject. Seem reasonable?

[cojak]

So it turns out that it's really to cover the scenario where I close my company and HMRC then go after the agency for debt collection because they determine that actually, a contract was inside IR35 (although the clause also covers them for more than this).

I see the point -- but still find it unacceptable.

Agency suggested I sign the contract (as it will take a couple of days for legal review and revision, which would overrun the start date) and send an email with a read receipt stating explicitly which parts of the relevant clause I reject. Seem reasonable?

No it isn’t reasonable. You can bet your sweet patootie that email will mysteriously ‘disappear’ as soon as you send it.

The contract is what counts, not any useless email.

[MrButton]

To reiterate. Do not trust the agency. Their priority is just to get you on site and working, they do not have your best interests in mind.

They should be able to amend the contract and get it signed quickly enough to not delay your start date too much.

[Hobosapien]

Agency showing why we think they're such slimy shysters.

Do not sign a contract until you are happy with the terms you are signing.

Also do not start a contract unsigned as that infers you accept the terms and the agency no longer requires a signature, though not sure if that would stand up in court.

[pauldee]

So it turns out that it's really to cover the scenario where I close my company and HMRC then go after the agency for debt collection because they determine that actually, a contract was inside IR35

Is this a plausible scenario?

[ShandyDrinker]

Is this a plausible scenario?

My reading of it is that we're likely to see more and more agencies now try this on with clauses in their contracts effectively trying to pass the buck for failure of IR35 status decisions being passed on to the contractor. I wouldn't be surprised if this becomes more commonplace in the run up to April 2020.

[cojak]

My reading of it is that we're likely to see more and more agencies now try this on with clauses in their contracts effectively trying to pass the buck for failure of IR35 status decisions being passed on to the contractor. I wouldn't be surprised if this becomes more commonplace in the run up to April 2020.

Either that or they try shovelling everyone into inside IR35 contracts.