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New IR35 'Friendly' contract? Dodgy agents?

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    New IR35 'Friendly' contract? Dodgy agents?

    Hello

    I'm really starting to distrust the agency i'm with, what do you think?

    I had to threaten to leave to get them to issue a SDS.. they came back with an outside determination on Friday.. even though they actually did it on the 2nd of March according to the date of the document. In the email they said they will end my current contract and issue a new one that's been fully checked to be good for IR35. I then had to chase them to get a draft copy, so i could review.

    Just got a draft copy and it has quite a few new sections like this..

    In respect of Off-Payroll, if either the Contractor and/or the Agency initiate the ‘client-led status disagreement process’ (as set out in the HMRC Employment Status Manual) then at the discretion of either the Contractor or the Agency, payment of the Fees to the Contractor maybe withheld until the dispute in respect of a SDS has been resolved.
    If it is determined at any time that the Assignment does not fall outside the scope of the IR35 Intermediaries Legislation, the Agency shall be entitled to make whatever deductions from the Fees necessary to satisfy the Agency’s and Contractor’s obligations under Off-Payroll, and the Contractor shall be liable as set out in Clause xxxx
    The Contractor shall indemnify in full and on-demand and hold harmless the Agency, the Officers and the End-User against all Losses connected with:
    xxxx. any taxes, national insurance contributions, deductions, fines, penalties and/or interest as shall from time to time be due from or assessed on the Contractor and/or the Personnel in connection with this Assignment Contract or which may be imposed upon or accrued by the Agency and/or the End-User as result of this Assignment Contract.
    xxxx. any claim by the Personnel relating to employment rights.
    xxxx. any claim or demand, howsoever arising, against the Agency or End-User for PAYE Income Tax and/or Employee's and/or Employer's National insurance Contributions and/or Apprentice Levy relating to any Personnel including claims arising out of Off-Payroll.
    I've been contracting for about 17yrs now and can look at a contract and figure out if there is something iffy... All this sounds very iffy to me.
    I have sent it off to be reviewed but what do you think?

    To me it looks like there trying to hold back as late as possible to squeeze this though due to the panic of people not wanting to be out of work.

    #2
    reads to me like they want to make sure that if you are actually found to be inside later on they withhold payment so that taxes can be covered.
    And if there is a dispute about status they can also withold payment

    At the end of the day, your status is totally outside the control of the agent, so they want to make sure they are covered if it goes wrong.
    All that being said, you should get it reviewed by a professional.
    See You Next Tuesday

    Comment


      #3
      Originally posted by Twoshrubs View Post
      Hello

      I'm really starting to distrust the agency i'm with, what do you think?

      In respect of Off-Payroll, if either the Contractor and/or the Agency initiate the ‘client-led status disagreement process’ (as set out in the HMRC Employment Status Manual) then at the discretion of either the Contractor or the Agency, payment of the Fees to the Contractor maybe withheld until the dispute in respect of a SDS has been resolved.

      To me it looks like there trying to hold back as late as possible to squeeze this though due to the panic of people not wanting to be out of work.

      Interestingly, the very guidance they are referring to states, which considering there is some "End-User", quite likely to be applicable (or maybe not - that depends on a full supply chain):
      "An agency who is not the deemed employer (see ESM10017) within a contractual chain does not have the right to use the client-led disagreement process."
      From here: https://www.gov.uk/hmrc-internal-man...anual/esm10015

      I find this is very interesting topic - if customer may change determination mid-contract and most importantly any consequences for that with regards to already billed time. My contract for example states that we are engaged on outside basis (SDS provided, etc.) and contains provisions for what if "inside IR35", however not suggesting on any point that this determination can change (within remit of the contract), unless "material" change happen on my side.

      Personally, I would never sign the first one, probably would ask for amendment of second one to clarify when and why determination could change and maybe would ask professional about third. However, third seem to be protection from claims if there is argument between Personnel (you as person) and Contractor (your company) - I had something like this in most of my contracts before reform.
      Last edited by Sub; 27 March 2021, 15:58.

      Comment


        #4
        Clause 1 and 2 are actually there to allow a determination to change - as it can up to the point the end client pays the first bill so I can't see you getting far there. I don't see any problem with it being there for a agreement that is supposed to be outside but I would insist on the agency being removed from clause 1 (as only the agency is going to be stupid enough to make an appeal that the contract is inside IR35 which is the scenario we care about).

        Clause 3 I suspect is completely illegal and would want a lawyer to explain exactly what it means and remove it - I read it very differently to how Sub is reading it.
        merely at clientco for the entertainment

        Comment


          #5
          Thank you all for the feedback.
          Some excellent points to raise once the review comes back.

          Thank you.

          Comment


            #6
            This sort of thing needs to be nipped in the bud before it becomes widespread. The assessment should be made up front then the dye is cast. If it leads to cautious assessments then that is one thing but they need to own the decision.

            Comment


              #7
              Originally posted by SussexSeagull View Post
              This sort of thing needs to be nipped in the bud before it becomes widespread. The assessment should be made up front then the dye is cast. If it leads to cautious assessments then that is one thing but they need to own the decision.
              die

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

              Comment


                #8
                Originally posted by SussexSeagull View Post
                This sort of thing needs to be nipped in the bud before it becomes widespread. The assessment should be made up front then the dye is cast. If it leads to cautious assessments then that is one thing but they need to own the decision.
                IPSE was one of the people who requested the rules changed from statements in advance of work beginning to statement prior to first payment because as Lance states the actual method of working won't be known until work has started (especially say when a contract that should be outside but the behaviour moves towards an inside contract).
                merely at clientco for the entertainment

                Comment


                  #9
                  Originally posted by eek View Post

                  IPSE was one of the people who requested the rules changed from statements in advance of work beginning to statement prior to first payment because as Lance states the actual method of working won't be known until work has started (especially say when a contract that should be outside but the behaviour moves towards an inside contract).
                  In a perverse sort of way, this makes sense. It will focus the mind of the "true" contractor (ie. not just a disguised employee) to ensure their working practices fit with what they expect to be an outside determination and that should in turn cause frank discussions with the client about their own expectations at to whether they truly regard the contractor as a supplier or a as disguised employee.

                  Contractors who are confident that they fit with the supplier model should not really be concerned by this.

                  Of course, there is always that risk that a client gets nervous and issues an inside determination even if the contract and working practices would otherwise indicate, especially if the contractor has a signed something indemnifying the agency/client.
                  Last edited by Paralytic; 28 March 2021, 19:31.

                  Comment


                    #10
                    Originally posted by Paralytic View Post
                    Contractors who are confident that they fit with the supplier model should not really be concerned by this.
                    But that's probably most of them, even the tulip ones that don't have a clue
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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