Newbie and IR35 (duck and cover)

[northernladuk]

Nothing scares me. Except clowns.

To be clear, the contract review came back with strong pointers toward being outside (MoO, financial risk etc) but picked up these throwaway phrases in the schedule that could point to being inside. The working arrangements questionnaire came back very positively as being outside.

The contract reviewer offered her opinion in summing up as it not being definitively either, but suggested that to mitigate I should start building an evidence file (confirmation of arrangements and so on)

As we have a duty to ensure we take reasonable care when assessing our IR35 status, a paid professional review, subsequent report and acting on the advice contained in the report is a good start. It may not be the golden bullet but there are no absolutes from anyone other than her Maj's revenueweenies.

You are right about not being no absolutes but if I had paid to have my contract checked I want an inside or outside decision and if it isn't outside I want to know exactly why and exactly what to change. Not being definitively either is just a plain cop out. I am sure the response was more complex than what you have put here but the way you put it in your post doesn't sit right with me. I can charge someone a hundred quid to say that. If it is not definitely outside then I want to know exactly why not. Ok ok nothing is definite with IR35 but there is a point we can be as safe as we possibly can with all the major pointers being well covered. No definitively is next to useless. You could end up losing 10's of k plus other legal ramifications. That answer isn't good enough.

Remember the most important thing above all this paperwork is the actual working practice as well so stay vigilant on that front. The paperwork won't save you if your working practices are not outside.

[cojak]

One more thing, do not turn up to start the contract until the contract is reviewed.

I don't understand that you paid (you said your accountant charged to review) good money to get the contract review but didn't wait to get the result!

[kungfugerbil]

One more thing, do not turn up to start the contract until the contract is reviewed.

Again, noted for the future. The client needed someone to start pronto - I could have held out for a few weeks until contracts were sorted, but the gig is good and at a decent rate so I balanced the desire to get everything squared away in triplicate with the very real possibility that there would be no contract if I did so.

NLUK - you're quite right, there is more detail than I have shared so far, but I thought a 23-page dump of the minutiae wouldn't go down well for a first post. I did get a 'these are the things you need to address to ensure you're outside" - the daft contract wording previously identified being the primary one.

There was also a suggestion to elaborate on the project - the deliverables section of the schedule just has a really vague project title which the revenue could say wasn't in fact a discrete piece of work but a general backfill of resource. Easily sorted with a note from client describing the fixed deliverables and genuine end-date.

The report concluded that if these were addressed then the balance of evidence would overwhelmingly suggest outside. My issue is that I cannot address the spurious contract wording, so that leaves me not definitively in or out. The contract reviewer believed that I could mitigate the contract wording by demonstrating the correct nature of the working arrangements as she believed the revenue are more concerned with what actually happens than window dressing in an off-the-shelf contract that the agency just happened to screw up

Cheers for the input folks.

[dmini]

Again, noted for the future. The client needed someone to start pronto - I could have held out for a few weeks until contracts were sorted, but the gig is good and at a decent rate so I balanced the desire to get everything squared away in triplicate with the very real possibility that there would be no contract if I did so.

Reviews should NEVER take a few weeks. This is a very fast moving market It is quite rare to have a contract set up for weeks in advance - and to actually get sight of that contract as well. Certainly in my experience they generally want you to start in a few days time, maximum. Anyone reviewing contracts and taking that long to respond is not worth using, to put it mildly. B&C say 5 days max, but generally they have been done in 2-3 days and often far less! I tend to do shorter contracts, so have developed a good working relationship with them over the years.

[MyUserName]

Sorry, I am a little unclear on the details:

Did you have the contract reviewed (including these additional clauses) and get an IR35 fail result, the agency refused to change the contract and then you started working for the client thus accepting a contract which you were told was inside IR35?

If so, I would declare it inside IR35. HMRC will crucify you if you have been told it is inside and you try to evade the tax liability.

You can buy insurance but it might not cover you if the contract has failed review.

It is a good idea to keep track of things which show you are outside IR35 regardless of anything else IMHO. There is no need to go mad about it but it is good to keep yourself aware of your working practices to prevent you gradually slipping inside a company.

[kungfugerbil]

Did you have the contract reviewed (including these additional clauses) and get an IR35 fail result

No. As explained above. It's an IR35 'pass' with two sentences that are superfluous, misleading and contradictory but could indicate to an HMRC inspector that the nature of business was different. The sentences don't reflect the reality, which is why the advisors are asking me to ensure I document the actual working arrangements and get them signed off.

Reviews should NEVER take a few weeks

The review didn't - it took a couple of days but from being contacted about the gig and starting on site was 6 days in which I had to get MyCo set up, accountant, bank account and wrestle a contract out of the agency. The 'few weeks' referred to the time it could have taken to do all the above, get a contract review, negotiate with the agency, get a revised contract, get that checked and signed then negotiate a start date.

[northernladuk]

The review didn't - it took a couple of days but from being contacted about the gig and starting on site was 6 days in which I had to get MyCo set up, accountant, bank account and wrestle a contract out of the agency. The 'few weeks' referred to the time it could have taken to do all the above, get a contract review, negotiate with the agency, get a revised contract, get that checked and signed then negotiate a start date.

And this is where you have to understand your situation and do some hard business. Once they make they offer you tell them you accept subject to contract review which will bag you a couple more days and then put the date you want to start. You put...

The client needed someone to start pronto - I could have held out for a few weeks until contracts were sorted, but the gig is good and at a decent rate so I balanced the desire to get everything squared away in triplicate with the very real possibility that there would be no contract if I did so.

You haven't really balanced anything here, you have bowed to pressure and gone in with a massive risk hanging over you which could in time make the whole contract a waste of time. You negotiate with them and go in when you are good and ready. No point doing any checking if the answer is just to start when you are told. You are over playing the contract not being there. You will be surprised how unreal that possibility is if you approach it differently. Hell, people get and keep contracts starting a week and going on maternity leave. A couple of days to get your legal issues in order isn't a lot to ask.
Bear in mind they want you to start pronto but it is going to take them 2+ weeks to find someone else so waiting a few days more for you, although a bit inconvenient to them, is not going break anything. Cards are in your hand at this point so use them. They won't drop you for the sake of a few days. It's business.

[MyUserName]

No. As explained above. It's an IR35 'pass' with two sentences that are superfluous, misleading and contradictory but could indicate to an HMRC inspector that the nature of business was different. The sentences don't reflect the reality, which is why the advisors are asking me to ensure I document the actual working arrangements and get them signed off.

Ah right, you might be okay then. So their contract has contradictory clauses which they refused to amend?

[kungfugerbil]

Once they make they offer you tell them you accept subject to contract review which will bag you a couple more days and then put the date you want to start.

That is good advice I shall store for the next time. Cheers.

... a massive risk hanging over you which could in time make the whole contract a waste of time.

It's a risk I can mitigate and even if it were entirely within, it wouldn't be a waste of time for me, for now.

MyUserName - that's about the size of it. The meat of the contract is fine, the working arrangements are perfect from ir35 POV, but they have put a couple of stupid phrases in the schedule of responsibilities that contradict the main contract.

It's surprising how little many folk know or care about IR35 - I knew I was onto a loser when my agency contact said "isn't ir35 just for when you've been in one place for two years". Oh dear.

[northernladuk]

It's surprising how little many folk know or care about IR35 - I knew I was onto a loser when my agency contact said "isn't ir35 just for when you've been in one place for two years". Oh dear.

If you are new to contracting and have already seen it then wait till you have a couple of gigs under your belt and spoken to other contractors. Agencies don't really care about IR35, it's not their risk. What is staggering is the number of contractor that are not aware/don't care. Granted we are super anal about it on here as we talk about it a lot but I can't get over the number of people sat around me right now that just don't care. They could be right, the number suggest they have more chance of being kicked to death by a donkey but a modicum of effort wouldn't go amiss. I just hope HMRC see a way of targeting these people before those that do put the effort in though.