Hello,
There is a clause in a contractor agreement that was proposed to me that I am not comfortable with and I would like feedback on please.
The clause is as follows:
4.7 pay all Taxes due to the Tax Authorities and
comply with all and any requirements for filing
tax returns, and fully indemnify and keep us
indemnified upon demand against any costs
(including reasonable legal costs to defend any
claim) claims penalties or demands of us which
may be made by the Tax Authorities or any of
them in respect of non payment of the Taxes
whether or not justified;
The second half of that statement I had issues with. Here is my e-mail to the agency and their reply:
My email:
I suggest that we can do without the second half of clause 4.7 as two companies doing business together we are to share the potential for profit and the risk in a equitable way. Plus as a two independent legal entities each has their responsibility with regards to tax I cannot think of a situation where hypothetically my company has tax troubles and that translates in tax authorities suing you therefore I have difficulty seeing what you are protecting against.
Agency reply:
I don’t believe I can move on that simply because in the UK, Her Majesties Government can see fit to sue me for any contractor tax that isn’t paid by said contractor. I appreciate that you are honest but should something happen to you for whatever reason and you were unable to pay any taxes due in the UK then they would come after my company for the monies owed.
I hope that makes sense? It’s simply how UK tax law can work sometimes and I need to reduce any risk to my company after monies have already been paid over in good faith.
Edit: the contract is not for the UK government.
There is a clause in a contractor agreement that was proposed to me that I am not comfortable with and I would like feedback on please.
The clause is as follows:
4.7 pay all Taxes due to the Tax Authorities and
comply with all and any requirements for filing
tax returns, and fully indemnify and keep us
indemnified upon demand against any costs
(including reasonable legal costs to defend any
claim) claims penalties or demands of us which
may be made by the Tax Authorities or any of
them in respect of non payment of the Taxes
whether or not justified;
The second half of that statement I had issues with. Here is my e-mail to the agency and their reply:
My email:
I suggest that we can do without the second half of clause 4.7 as two companies doing business together we are to share the potential for profit and the risk in a equitable way. Plus as a two independent legal entities each has their responsibility with regards to tax I cannot think of a situation where hypothetically my company has tax troubles and that translates in tax authorities suing you therefore I have difficulty seeing what you are protecting against.
Agency reply:
I don’t believe I can move on that simply because in the UK, Her Majesties Government can see fit to sue me for any contractor tax that isn’t paid by said contractor. I appreciate that you are honest but should something happen to you for whatever reason and you were unable to pay any taxes due in the UK then they would come after my company for the monies owed.
I hope that makes sense? It’s simply how UK tax law can work sometimes and I need to reduce any risk to my company after monies have already been paid over in good faith.
Edit: the contract is not for the UK government.
Comment