Contracts & IR35 etc

**Clare@InTouch** · 19 May 2010, 15:00

Substitution isn't the only factor - as long as your right of control is strong enough (and genuine) it could still be deemed to be outside of IR35.

**peterc2609** · 19 May 2010, 15:05

OK, so does this look OK as it is?

This Agreement is made on 20 May 2010

Parties:

1 “The Client”: Company 1.

2 “The Consultant”: My Ltd Co.

Recitals:

(A) The Company wishes to benefit from the skills and experience of the Consultant.

(B) The Consultant is an independent contractor willing and able to provide his/her services to the Company for the period contemplated by this Agreement.

OPERATIVE PROVISIONS:

1 Consultancy services

1.1 The Client engages the Consultant to provide the independent advisory and consulting services specified in the Schedule (“the Services”) to the Client and the Consultant agrees to provide such Services upon the terms and conditions set out below.

2 Duration

2.1 This Agreement shall commence on 20th May 2010 and shall continue until the parties terminate this agreement:

2.1.1 by the Client paying to the Consultant an amount equal to any fees outstanding under clause 4.1.1.

2.1.2 in accordance with clause 5 below

3 Consultant’s services

3.1 Throughout the term of this Agreement, the Consultant may accept and perform engagements from other companies, firms or persons which do not impinge on its ability to provide the Services at such times and in such manner as may (in the reasonable opinion of the Client) be convenient to the Client.

3.2 Throughout the term of this Agreement, the Consultant shall, when required, give to the Client such written or oral advice or information regarding any of the Services at it may require.

3.3 The Consultant agrees to provide the Services at such times and at such locations as the Client shall notify the Consultant.

3.4 The Consultant will undertake the Services to the best of his/her ability and in an expert and diligent manner at all times.

4 Fee

4.1 The Client shall pay to the Consultant a fee as follows subject to performance and delivery;

4.1.1 £xxx per day (inclusive of all expenses)

5 Termination

5.1 Without limitation the Client may by notice in writing immediately terminate this Agreement if:

6.1.1 the Consultant shall have been in breach of any of the terms of this Agreement which, in the case of a breach capable of remedy, shall not have been remedied by the Consultant within 7 days of receipt by the Consultant of a notice from the Client specifying the breach and requiring its remedy; or

6.1.2 the Consultant shall have failed or refused within a reasonable time to provide any one or more of the Services after being instructed in writing by the Company to do so; or

6.1.3 the Consultant shall have conducted himself in any manner which, in the reasonable opinion of the Client, has brought or is likely to bring either the Consultant or the Client into disrepute or has or is likely to impair the Consultant’s ability to provide any of the Services to the Client or to do so in any manner or at any time which the Client shall have reasonably required.

6. Confidentiality

6.1 The Consultant agrees to treat as secret and confidential and not at any time for any reason to disclose or permit to be disclosed to any person or otherwise make use of or permit to be made use of any unpublished information relating to the Client’s technology, or other know-how business plans or finances or any such information relating to a subsidiary, supplier, customer or client of the Client where the information was received during the period of this Agreement and upon termination of this Agreement for whatever reason the Consultant shall deliver up to the Client all working papers, computer disks and memory sticks or other material and copies provided to or prepared by it pursuant either to this Agreement or to any previous obligation owed to the Client.

7. Indemnity

7.1 In consideration of the Client entering into this Agreement the Consultant shall indemnify and shall hold the Client harmless against any claims, costs or legal expenses that the Client may incur as a result of or arising from the provision of the Services.

8. Status and tax liabilities

8.1 The Consultant warrants and represents to the Client that as of (date) he/she is an independent contractor and, as such, bears sole responsibility for the payment of tax and national insurance contributions which may be found due from it in relation to any payments or arrangements made under this Agreement and, further, agrees to indemnify the Client in respect of all and any income tax which may be found due from the Client on any payments or arrangements made under this Agreement together with any interest, penalties or gross-up thereon.

9. Notice

9.1 Standard notice will be one week’s notice from either party within the first month. Any notice required by this Agreement to be given by either party to the other shall be in writing and shall be served by sending the same by registered post or recorded delivery to the last known address of the other party and any receipt issued by the postal authorities shall be conclusive evidence of the fact and date of posting of any such notice.

10. Governing Law

10.1 This Agreement shall be governed by and construed in accordance with English Law and the parties submit to the exclusive jurisdiction of the English Courts.

**Spacecadet** · 19 May 2010, 15:29

The contract that I use makes it clear that in the event of subsititution I'm liable for paying the substitute and a suitable handover/training period is needed inline with the complexity of work involved. Both substitute and handover period are subject to acceptance by the client.

**Clare@InTouch** · 19 May 2010, 15:31

Not great in my view. It states you will perform the services where and when the client dictates, and there is nothing to state that you will carry out the services as you see fit.

Have a look at the PCG website, they have some standard contracts you can download for free. You could suggest using one of those with just teh substitution parts removed.

**peterc2609** · 19 May 2010, 15:38

Thanks, the contract I probably need is:

A05-10 Direct service provider-client agreement - Draft contract between contractor business and client, with explanatory notes

But I'm not a member of PCG.

And I ddn't think the free contracts are suitable.

I'll try and reword the current one myself, there is no other option at the moment!

**northernladuk** · 19 May 2010, 15:52

Originally posted by peterc2609 View Post

Hi All,

I'm due to start a contract tomorrow / Friday direct with a client.

They have sent me an initial contract / agreement which was between the Client and Myself (not Ltd Company).

I sent it back to them saying it needed to be between client and my ltd company, and should not mention my name, and it would also need a right of substistution clause to be IR35 compliant.

They sent it back having removed my name, but said they cannot put the substitution clause in as they would not want me to substitute anyone else in as it is for a short term contract!?!?

Should I send it back saying it needs this clause?

Thanks

The client doesn't care if the contract is IR35 compliant. Why should they put a clause in they don't even want?? It is up to YOU to make sure the contract is outside of IR35 and you must make sure that while doing that you don't put a load of crap in you cannot do, i.e. substitution when the cilent has flatly refused it. The contract at the end of the day has to reflect the working situation.

**FiveTimes** · 19 May 2010, 16:36

There are no payment terms on the contract ? How/when will the client pay ?

**peterc2609** · 19 May 2010, 16:52

Hmmm...

Not sure...

I'll have to have a word!

**peterc2609** · 19 May 2010, 17:42

OK, so I've just joined PCG.

Now to sorting the contract out... all 10 pages of it!

Contracts & IR35 etc