opt in/out confusion

[ftm]

Been speaking to an agent about a potential contract and all was well until he wanted to know if I was opting in or out of the employment regs. I'm a first-timer so I want to start off with a decent umbrella company and opt-in until I get the hang of this contracting lark.
Basically, he was telling me that I'd be a fool to opt in as the IR would be down on me like a ton of bricks for daring to claim tax relief on travel expenses.
Also claimed that hardly any contractors opt in nowadays and it makes no difference to the agency one way or the other.

Was he talking tulipe?

[malvolio]

Yes. In a word...

Opting in costs the agency time and effort, so they want you to opt out. Either in or out, it has no effect on your IR35 status and if you are unsure of how it all works, then opt in and take the security.

Expenses and taxation are nothing to do with it. He's getting confused about some of the more, errm, "adventurous" umbrella agency schemes. If you follow the rules (you do know the rules, I assume?), there will not be a problem.

Rule 1 of contracting - never ever believe an agent. He is not working for your benefit in any way shape or form.

[ftm]

Cheers fella. Just when I thought I knew sort of how it worked this agent tries to sound like he was my best buddy and warn me of the dangers of opting in.

I'm going to take the unadventurous route with a reputable umbrella (parasol any good?) and just claim mileage and receipted allowable expenses.

I take it that claiming mileage from home to contract location isn't as controversial as he was trying to lead me to believe (as long as you're at a single location for < 2 years)?

[malvolio]

Correct. You can claim from your normal place of work (i.e. home, in your case) ot your client's location, by the most reasonable route (which is not necessarily the shortest - if for example the short route goes through the middle of town and takes an hour whle the long one goes around and takes 15 moinutes, nobody will argue about it).

There was another thread on the two year rule recently that might repay some study.

[rootsnall]

I've never been audited but I think if you don't take the piss on any reasonable expenses ( inc home to work miles ) you'll be OK. Parasol will have a standard list of things you can claim that has been vetted by the IR, have a look on their website.

The opt in/out issue is a bit of mess, the only real advantage I can see on opting in is that the agency can't bind you to a long lock out clause from going direct to the client and they have to offer the client an option to rehire you on an 'extended period of hire' that is limited to I think 8 weeks ( 14 ? ) weeks. The extended period of hire part messes up their business if the clients are upto speed with it and want to renew and eventually take a contractor on direct. In practice this will rarely occur I think.

More importantly, in practice you are making yourself less attractive to the agency if you don't opt out and unless you are a stand out for a job and they have nobody else you are probably not being very wise opting out if the contract is only a possible. I'm on my first post regs job hunt and opting out when asked up front, much as I'd like to piss off the agents its not a good idea IMHO.

[Witchywoo]

I know that this is going to cause a few rolling eyes, but I would like to ask a question.

How can opting in to the Employment regulations have no affect on your IR35 status if you are trying to prove you are not employed?

[The Lone Gunman]

I know that this is going to cause a few rolling eyes, but I would like to ask a question.

How can opting in to the Employment regulations have no affect on your IR35 status if you are trying to prove you are not employed?

It is not employment regulations for a start.
Qdos (a respect law firm in employment law) stated that at best opting in was a minor pointer, but with sensible use could be a pointer to being outside.
One of the requirements stated in the regulations is that the client and agent must indicate if the contract is FOR or OF service, a major pointer in IR35 status.

Go away, read the regs (including the title) and then come and ask some relevant questions

[rootsnall]

If FTM is going umbrella and paying his full whack of NI he doesn't really care about IR35 status !?

[Denny]

I know that this is going to cause a few rolling eyes, but I would like to ask a question.

How can opting in to the Employment regulations have no affect on your IR35 status if you are trying to prove you are not employed?

Staying opted in won't make you employed. You have to still work through an umbrella or start your own limited company. Whoever told you that the agent would be your employer if you opted in? That only happens with high street temp agents who deduct PAYE and NI from source before paying you and sending you their own accountacy wing pay slip.

Always look to your end client on site working conditions to determine whether you are opted in or out. The agency contractor relationship will not determine this, even if the wording of the contract says otherwise. The IR are interested in reality not contract wording.

The truth of the matter is this: if you work on the client site almost continuously, use their equipment to do your main work, use the company facilities and so and don't have rights to substitute your own staff whilst you go off to take on another job then it is unlikely you will be deemed IR35 exempt. An IR35 friendly contract in exchange for opting out will not alter that one bit.

[tim123]

Staying opted in won't make you employed.

But it will imply, that you consider that, you have been placed at a client:

"b) by an employment business to an employee of the employment business for the purpose of finding or seeking to find another person, with a view to the employee acting for and under the *control* of that other person."

As that is the definition than an opted-in individual can be placed at a client site by an 'agent'.

Tim