contract arrived.

[reddeagle]

I received my contract via email last night. I talked to the agent about IR35 and he said that their contracts are IR35 friendly. I have had a glance over it but am not really sure of what to look out for so will get someone to review it.

Attached with the contract was a document called opt_out.

Subject: 	The Conduct of Employment Agencies and Employment Businesses     Regulations 2003

Legislation affecting recruitment agencies, their clients and people applying for work has been issued, effective from 6th April 2004. It is called The Conduct of Employment Agencies and Employment Businesses Regulations 2003 and can be viewed at www.hmso.gov.uk  - look for Statutory Instrument 3319.
Various groups such as the PCG lobbied the Government to have professional contractors (operating through their own personal services company or through an umbrella company) excluded from the legislation on the grounds that 

•	Professional contractors were businesses that didn’t need the ‘nanny state’ provisions of the legislation (primarily designed to protect vulnerable employees), and importantly

•	If professional contractors don’t opt out, it could significantly undermine their case for being considered outside of IR35’s net.


Whilst the Government refused to automatically exclude personal services companies and umbrella companies from the legislation, they have allowed such professional contractors as you to ‘opt out’ of the legislation – something that has been warmly welcomed by the PCG.

For further information follow the links below:
www.pcg.org.uk  www.contractoruk.co.uk  www.shout99.com


In order to opt out, both the professional contractor and his personal services company or umbrella company must agree to do so, prior to the start of a contract or extension. Having opted out, that status remains for the life of the contract. 

If you wish to opt out of this legislation in regard to the position you are applying for (or in regard to a proposed extension to your contract), please sign and return the opt out notification attached.

I assume i sign this!

[malvolio]

I received my contract via email last night. I talked to the agent about IR35 and he said that their contracts are IR35 friendly. I have had a glance over it but am not really sure of what to look out for so will get someone to review it.

Attached with the contract was a document called opt_out.



I assume i sign this!

I assume you definitely do not, under any circumstances. Assuming you want to opt out, a simple letter to that effect, mentioning both you and YourCo is all that's needed. And it has no bearing on IR35.

As for the main contract, get it over to Bauer and Cotterel before you do anything...

[Bluebird]

I "presonally" don't think that opting in or out affects the IR35 status of a particular assignment - there are bigger pointers to that.

However, many agencies want you to opt out for their own purposes " I believe " and therefore don't look kindly on those who STAY opted in.

I'd just sign it.

[Ardesco]

That looks like a load of old bollocks if you ask me.

No reason for somebody using an umbrella company to opt out IMHO. If you are using an umbrella company IR35 is not relevant because you are taking all of your earning through PAYE and being taxed as if you were IR35 caught anyway (Not that this has anything to do with IR35 anyway, see below).

If you have been introduced to the end client (i.e. had an interview, chatted on the phone, etc) you are opted in and it is too late to opt out like it or not.

If you are opted out you can opt back in at any point by writing to the agent and saying i'm now opting in. This is a legal right that they cannot refuse you.

PSC is a load of bollocks. Legally there is no such thing as a PSC, it is wording used by IR that may well be an attempt to group together a certain class of LTD Co's in an attempt to single them out for "special" treatment in the future.

You can still be 100% outside IR35 if you are opted in, agencies will tell you that being opted in is an IR35 pointer but it is not. They are just being lazy. If you are opted in the agency has a legal requirement to pay you money within a set period of time and they are supposed to verify that your resume is legit. they don't want to do this as it takes time and money and as a result they want you to opt out.

[Pondlife]

If you are opted out you can opt back in at any point by writing to the agent and saying i'm now opting in. This is a legal right that they cannot refuse you.

Not sure this is true. IIRC you can only opt in at a renewal.
The reverse is not the case at any point though.

[reddeagle]

That looks like a load of old bollocks if you ask me.

No reason for somebody using an umbrella company to opt out IMHO. If you are using an umbrella company IR35 is not relevant because you are taking all of your earning through PAYE and being taxed as if you were IR35 caught anyway (Not that this has anything to do with IR35 anyway, see below).

If you have been introduced to the end client (i.e. had an interview, chatted on the phone, etc) you are opted in and it is too late to opt out like it or not.

If you are opted out you can opt back in at any point by writing to the agent and saying i'm now opting in. This is a legal right that they cannot refuse you.

PSC is a load of bollocks. Legally there is no such thing as a PSC, it is wording used by IR that may well be an attempt to group together a certain class of LTD Co's in an attempt to single them out for "special" treatment in the future.

You can still be 100% outside IR35 if you are opted in, agencies will tell you that being opted in is an IR35 pointer but it is not. They are just being lazy. If you are opted in the agency has a legal requirement to pay you money within a set period of time and they are supposed to verify that your resume is legit. they don't want to do this as it takes time and money and as a result they want you to opt out.

I am contracting via a limited company:

The agency got me an interview with the client.

Nothing about the contract was discussed with the Client only via the agency.

[Ardesco]

Not sure this is true. IIRC you can only opt in at a renewal.
The reverse is not the case at any point though.

There is nothing in the legislation that says that you need to wait until the contract ends to opt back in. There is a paragraph that says you need to wait until you placement with the current client ends before you can opt out.

It is entirely reasonable to opt back in at any point.

[Ardesco]

I am contracting via a limited company:

The agency got me an interview with the client.

Nothing about the contract was discussed with the Client only via the agency.

If you have had an interview with the client you have been introduced and techniocally you are opted in like it or not. The agency will probably not understand this and push for you to opt out anyway.

At the end of the day I personally don't think opted in or out makes much difference if you are dealing with a large company that has defined payment terms and has the cashflow to be able to pay you on time. I would check out the benefits that opting in provides however, you may want them for peace of mind.

It does however annoy me when agencies pull all this bulltulip in an attempt to force you to opt out. IMHO it is against the spirit of the legislation at best, and contravines the right to not be discriminated against for wanting to opt in at worst. Something it would be nice to see the PCG make a stand about and get some real clarification (I must post about it on thier forums some time). On the flipside you can try and use it as a bargaining chip to make the contract IR35 compliant but teling them you will opt in unless they tweak the contract for you. Remember that opting in will cost them more money so it is in thier interests to get you to opt out.

As for the contract, it is between you and the agency and has nothing to do with the client. The agency will have a separate contract with the client that is nothing to do with you.

[Pondlife]

There is nothing in the legislation that says that you need to wait until the contract ends to opt back in. There is a paragraph that says you need to wait until you placement with the current client ends before you can opt out.

It is entirely reasonable to opt back in at any point.

But there may be terms in the contract that are only valid if you are opted out. You can't therefore invalidate the T&Cs you signed up to by sending a letter.

[Ardesco]

If there are T&C in the contract that says "These T&C are only applicable if you are opted out" then you are not changing the T&C, they just no longer apply because you are no longer opted out. The contract still stands and the T&C still stand, nothing has changed from a legal point of view.

It is like having a contract that states "You are allowed to drive company cars if you have no points on your license". If you get some points on your license you have not changed the T&C of the contract, you just have a term that no longer applies.

<insert random example here>