Opt out of Conduct of employment agencies 2003 act?

[SteelyDan]

I am confused on this... can anyone confirm whether the email extract below is agency bulltulip or not?

Regarding the Conduct of Employment Agencies 2003:

Aside from the poor English (theirs), which looks like it was knocked up by an illiterate during their coffee break, this is utter 5hite.
Which agency is pedalling this? Name & shame plz for all our sakes.

[aytri]

They've had "legal advice", so they won't be backing down any time soon.

I'm just a bit nervous about the whole PAYE thing... what if they're right?! Although I suspect this is exactly what they want me to think...

[malvolio]

They've had "legal advice", so they won't be backing down any time soon.

I'm just a bit nervous about the whole PAYE thing... what if they're right?! Although I suspect this is exactly what they want me to think...

They aren't. Ignore them. If they make a fuss with the client, sue them for restraint of trade.

Always worth remembering that the Regs are about employment laws and IR35 is about tax laws. There is no connection between the two: IR35 cases are assessed using employment indicators to establish the actual commercial relationship between worker and client, but that's all. The average agent - let alone the epsilon semi-morons they put in front of us professionals - are not smart enough to understand the difference.

[tractor]

...

With the introduction of IR35, AWR, some aspects of ITEPA, S55 and other 'tax simplification measures' a healthy sub industry has grown up around contracting. It not only includes umbrellas and the like but also expanded the earnings potential for employment lawyers who use any change or addition in regulation to create more FUD. Agents are only too happy to pay for this because it reinforces many of the claims like the one listed above. None of this sub industry has any benefit for the contractor except the Opt Out clause; and there are benefits for and against depending on your position. These lawyers and agents seek to remove that benefit entirely for those that do not opt out.

This also suits HMRC and the government because eventually, it will frighten our clients into not using contractors at all. They all want us to become temps on the payroll. IMV this is a landscape HMRC have created on purpose. They cannot beat us all in court. They would rather back down than get a detrimental ruling that may give us a silver bullet. They will never get rid of IR35 because it is sufficient deterrent and if they did, the floodgates would open up and they would lose far more in tax than they take with IR35. This is why they messed the select committee around so much and why they are changing legislation to transfer risk to our clients.

And with all this, I cannot express how stupid agents actually are in introducing people before insisting that they opt out!

To get back to the last post, this year, I have had the same happen to me and when the agent ran crying to the client and persuaded them that there was additional risk, the client withdrew the contract offer and turned it into a FTC offer at half the rate! So whilst the claim that agents are making may be BS, the reality is anything but!

When all this started, part of the HMRC defence was that this was not a measure targeted at a single type of company and that it would be applied equally to nannies and chauffeurs. I wonder how many non IT contractors have actually been investigated since the Judicial Review?

[tractor]

They aren't. Ignore them. If they make a fuss with the client, sue them for restraint of trade.

Always worth remembering that the Regs are about employment laws and IR35 is about tax laws. There is no connection between the two: IR35 cases are assessed using employment indicators to establish the actual commercial relationship between worker and client, but that's all. The average agent - let alone the epsilon semi-morons they put in front of us professionals - are not smart enough to understand the difference.

That is not a realistic option. The agent will have an off book conversation with the client or the Client HR and muddy the waters sufficiently for the client to change policy and insist on no non opted out contractors in the future. You try proving that in a court of law. It is not going to happen. Let's face it, the only organisation that could pick that one up is the PCG and I doubt they ever will fr the same reason - it is so difficult to prove. I fully expect this to become the norm so much that they will start to actually flout the law publicly and I don't think it will be too long before we see adverts with 'Opted Out Contractors only' in the text. Yes, agents are that stupid or brazen.

[tractor]

...

Aside from the poor English (theirs), which looks like it was knocked up by an illiterate during their coffee break, this is utter 5hite.
Which agency is pedalling this? Name & shame plz for all our sakes.

Naming and shaming actually really does need to be done over this.

It doesn't have to be a legally actionable way either. Perhaps a positive list could be kept as a sticky called 'Agents that allow unrestricted opting out'. Only agents that do not apply any pressure at all should be included.

[tractor]

...

I don't see what it has to do with the end client. My company contracts with the agent, the agent contracts with the end client.

So if I opt in (or rather, don't opt out!), surely it has nothing to do with the end client? And has no bearing on PAYE/tax/expenses or anything else?!!!

They are linking it with the 'control' aspect of the Conduct Regs, the claim being if you are not opted out, you are subject to control which when spun by agents and some others render your IR35 defence less effective. They will spin it as non-existent though.

With the changes in the Finance Act this year, a loophole was closed that covered those that are self employed (NOT LIMITED COMPANIES) but the agents are lumping all contractors together regardless of legal status and using a 'one size fits all' solution to cover their backsides from this years changes.

Agents and their legal advisors have made it all very confusing on purpose to FUD the client into supporting the agent requirement to transfer as much risk as possible to the contractor by coercing us to opt out usually against our better judgement.

[malvolio]

They are linking it with the 'control' aspect of the Conduct Regs, the claim being if you are not opted out, you are subject to control which when spun by agents and some others render your IR35 defence less effective. They will spin it as non-existent though.

The control element is in the AWR, not the Regs. Either way, it is not the sole determinant of being IR35 caught anyway

[tractor]

..

The control element is in the AWR, not the Regs. Either way, it is not the sole determinant of being IR35 caught anyway

Wrong again!

Read the Conduct Regs, Part 1, Section 2 (b), (c):

(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;
(c) by an employment business to a person (the “first person”) for the purpose of finding
or seeking to find another person (the “second person”), with a view to the first person
becoming employed by the employment business and acting for and under the control
of the second person;
“work-seeker” means a person to whom an agency or employment business provides or
holds itself out as being capable of providing work-finding services.

They are somewhat successfully from the client perspective, using that passage to link not opting out with D & C and claiming that it solely puts you inside IR35. You know it's incorrect to do so and so do I but they will continue to do so until forced otherwise - similar to advertising for SC contractors and other bad practice. Some are also spinning PCG advice to reinforce that misinterpretation.

The meaning of 'control' within the conduct regs is entirely different to the meaning of 'Direction and Control' within IR35 and the HMRC Employment Status Manual.

Unfortunately there are those even within the contracting industry that view the two as the same and infer from the conduct regs that if you do not opt out, even your subbies are subject to control.

[Batcher]

I am confused on this... can anyone confirm whether the email extract below is agency bulltulip or not?

Regarding the Conduct of Employment Agencies 2003:

A further point to note as well for the contractor that if he 'opts-in' they should then cease to claim any Limited Company expenses for travel, sustenance, computer and mobile phone and regular working expenses via their Limited Company. Continuing to do so whilst opting out will be deemed as fraudulent by the HMRC against the Limited Company.

They seem to have got themselves confused.