New IR35 'Friendly' contract? Dodgy agents?

[SussexSeagull]

die

How can it be made up front when the working practises aren't know?

By clients deciding if they want to engage a contractor or an employee.

[Lance]

By clients deciding if they want to engage a contractor or an employee.

And if the worker turns out to need SDC? Or the manager wants to exercise it? What then?
You'd be happy with the client changing your SDS? As they are entitled to do.

I understand your point, but it won't stand up to reality. HR/legal/procurement/finance make these decisions. The managers/handers/whatever will work in their own way. How often have we come across a client that wants to exercise full control?
And how often to 'contractors' suck it up?

When HR/legal/procurement/finance have to carry the can for the liability they're not going to take risks.

[ladymuck]

By clients deciding if they want to engage a contractor or an employee.

In an ideal world you have a client who understands what they need, procures the right sort of resource and knows how to manage them. In reality, most contractors are a bum on a seat, brought in to fill a gap.

[BlasterBates]

I think it would be unlikely to get a contract through any agency whereby the client and agency take full liability for the tax that the contractor is liable for. In other words if you are found retrospectively to be inside IR35 you will need to foot the bill. That's basically what is being stated. No harm in getting it reviewed or refusing, but I suspect to get around clauses like these the answer will be to go inside IR35 from the outset.

[SussexSeagull]

In an ideal world you have a client who understands what they need, procures the right sort of resource and knows how to manage them. In reality, most contractors are a bum on a seat, brought in to fill a gap.

That might be the case but if so then be up front and say it is inside from the get go as opposed to go through the whole song and dance.

[SussexSeagull]

I think it would be unlikely to get a contract through any agency whereby the client and agency take full liability for the tax that the contractor is liable for. In other words if you are found retrospectively to be inside IR35 you will need to foot the bill. That's basically what is being stated. No harm in getting it reviewed or refusing, but I suspect to get around clauses like these the answer will be to go inside IR35 from the outset.

I am not a legal expert in such matters - and if I was this hasn't been tested in court yet - but the point of the rule change is the end client are responsible. Can that be overruled in a contract?

As we all know investigations can happen years after the event by which time the employee/worker/contractor could be long gone and the Limited company could have been legitimately dissolved. Not sure if the HMRC come knocking a clause in a contract is going to cause them too many sleepless nights in the quest for what they see as their money.

[Lance]

I am not a legal expert in such matters - and if I was this hasn't been tested in court yet - but the point of the rule change is the end client are responsible. Can that be overruled in a contract?

As we all know investigations can happen years after the event by which time the employee/worker/contractor could be long gone and the Limited company could have been legitimately dissolved. Not sure if the HMRC come knocking a clause in a contract is going to cause them too many sleepless nights in the quest for what they see as their money.

Indeed...

The thing is that the clause mentioned isn't trying to transfer liability to the contractors LTD.
It's indemnifying the agency against any losses made. A subtle but important difference.

Will it hold up in law? No idea. That's why my first suggestion was to seek professional advice.

[jamesbrown]

I am not a legal expert in such matters - and if I was this hasn't been tested in court yet - but the point of the rule change is the end client are responsible. Can that be overruled in a contract?

As we all know investigations can happen years after the event by which time the employee/worker/contractor could be long gone and the Limited company could have been legitimately dissolved. Not sure if the HMRC come knocking a clause in a contract is going to cause them too many sleepless nights in the quest for what they see as their money.

In the first instance, no.

In the first instance, the Fee Payer is liable for all taxes, penalties and interest due, absent fraud by another party, but anyone in the supply chain above the PSC may ultimately be found liable and pursued under the transfer of debt provisions, even in the absence of fraud.

Bottom line, the supply chain above the PSC is going to pay out first and will then need to attempt to recover the money, if at all possible. HMRC only cares that they're covered, and this is why sensible clients will opt to avoid PSCs altogether.

Contract clauses are very much downstream of that and whether those contract clauses will stick (in terms of recovering any money from the PSC) is very debatable.

[BlasterBates]

I am not a legal expert in such matters - and if I was this hasn't been tested in court yet - but the point of the rule change is the end client are responsible. Can that be overruled in a contract?

As we all know investigations can happen years after the event by which time the employee/worker/contractor could be long gone and the Limited company could have been legitimately dissolved. Not sure if the HMRC come knocking a clause in a contract is going to cause them too many sleepless nights in the quest for what they see as their money.

The contract doesn't overrule the client's responsibility. HMRC will still litigate against the client, but it makes it explicitly clear that the client/agency can then recover it from the contractor if tax wasn't deducted when it should have been. In any case the personal tax liability of the contractor will have to be recalculated so he's going to be sucked into the dispute even without the contract clause.

[malvolio]

I'll make the same point I made a while back when talking about when the SDS is run...


That in most cases, especially BigCo client ones, the contractor and their line manager (you know what I mean) who know the working arrangements in reality, won't be the ones making the decision. So it's all a bit random anyway.

That said, it's down to the contractor to nail these sorts of things at interview stage, not on joining.