Contract does fall within IR35 according to accountant

[northernladuk]

If an experienced amateur (accountant) leans one way and a professional the other, I'd still be worried. A professional review means precisely diddly squat except in regards to insurance, doesn't it - it's still just an opinion.

I have an opinion but anyone would be stupid to listen to mine... so I disagree, there are varying levels of opinion. A specialist has an opinion based on a lot more knowledge and fact that an accountant that has an opinion based on some stuff he read. One is much more credible than the other and in such a grey area it's the best you can get.

Is the only purpose of a professional review to get insurance in case you are investigated?

There is an interesting question I think there is more to it than that but I am sure it's the case in many situation.

[TheFaQQer]

Considering you basically have 3 things to look for, RoS, MOO and D&C, what can a professional see that anyone else can't?

Here's some of the things that Qdos spotted for me over the years that others have missed:

• The difference between including a clause which defines "Personnel" as "The personnel specified in Schedule 1 (and which includes any agreed replacements thereof) who are to be supplied by the Contractor to provide the Services." which implicitly gives a right of substitution, but there is no explicit RoS clause
• Spotting that what looks like a reasonable RoS caluse still would fail because the right wasn't unfettered.
• Does having no right of termination help or hinder your IR35 defence?
• Spotting that there should be flexibility in the location specified
• Spotting that there should be "or designated substitute" in the right places where the consultant's name is provided
• Making sure that the phrase "without prior approval" is worded correctly in the light of Dragonfly
• Making sure that references to call out rates, standby rates and overtime are correctly worded to avoid employee-like conditions
• Making sure that if you have to notify someone about planned absence, the clause is worded correctly

I'm not suggesting that all accountants would miss the subtle implications of some clauses, but with each IR35 case, there may be implications for effective contract wording in the future (see above re Dragonfly)

Having been a contractor for a while now, every contract I receive (apart from one), I've looked at and thought "yep, that'll pass". And almost every one has had to have a wording change when it's gone to Qdos for review.

[jamesbrown]

Spotting that there should be "or designated substitute" in the right places where the consultant's name is provided

I agree with what you're saying - there are indeed some subtleties that can be missed without an expert eye. On the above, though, I would never have my name appear in a contract, except for the signature.

[TheFaQQer]

I agree with what you're saying - there are indeed some subtleties that can be missed without an expert eye. On the above, though, I would never have my name appear in a contract, except for the signature.

I'm more than happy for the schedule to detail who the ideal person would be to do the work, or a substitute if they aren't available.

I never sign the contract, that's what the company secretary is paid to do.

[blacjac]

4. If you do get a HMRC query, call in your insurance (you do have insurance, don't you?) and sit back comfortably knowing that even in the worst of scenarios that you have the cash to pay the bill.

I do that anyway just in case I'm ever at the tail end of a seriously irrational set of decisions and court outcomes.

What a load of rubbish.
a) The contract has been reviewed and flagged as within IR35, so any insurance would not pay out.
b) You may have the cash to pay the tax owing, but what about the penalties? These would be pretty darn stiff if you had withheld tax that you knew you owed because the contract failed a review. That's more commonly known as tax evasion.

Don't drop the soap....

[malvolio]

But then again...

Here's some of the things that Qdos spotted for me over the years that others have missed:

• The difference between including a clause which defines "Personnel" as "The personnel specified in Schedule 1 (and which includes any agreed replacements thereof) who are to be supplied by the Contractor to provide the Services." which implicitly gives a right of substitution, but there is no explicit RoS clause

True, but you needs the mechanism of substitution to be defined. What if the client doesn't like your Scouser subbie?

• Spotting that what looks like a reasonable RoS caluse still would fail because the right wasn't unfettered.

You should spot that one yourself. And it's "reasonably unfettered".

• Does having no right of termination help or hinder your IR35 defence?

We've answered that one many times. What is the answer?

• Spotting that there should be flexibility in the location specified

Irrelevant, actually. Some roles demand that you be on site; if everyone has to be this doesn't matter.

• Spotting that there should be "or designated substitute" in the right places where the consultant's name is provided

Actually disagree. The "consultant" is all the reference you need. The "consultant" doesn't need to be named

• Making sure that the phrase "without prior approval" is worded correctly in the light of Dragonfly

Possibly, but trivial

• Making sure that references to call out rates, standby rates and overtime are correctly worded to avoid employee-like conditions

Possibly but don't actually see how since none of those ought to apply to contractors anyway; you charge fees for services rendered and time worked.

• Making sure that if you have to notify someone about planned absence, the clause is worded correctly

Meh. This is question of professional courtesy, not contractual obligation.

I'm not suggesting that all accountants would miss the subtle implications of some clauses, but with each IR35 case, there may be implications for effective contract wording in the future (see above re Dragonfly)

Having been a contractor for a while now, every contract I receive (apart from one), I've looked at and thought "yep, that'll pass". And almost every one has had to have a wording change when it's gone to Qdos for review.

And while I agree that most accountants aren't as good at IR35 as the specialists, some are (any that have the PCG Accredited Accountant status for one) and are perfectly capable of rendering an opinion. However, a good accountant will admit their limitations.

[TheFaQQer]

True, but you needs the mechanism of substitution to be defined. What if the client doesn't like your Scouser subbie?

The wording of the new clause is exactly what Qdos provided. The original contract implied that there was a right of substitution, but without including an appropriately worded clause to define how that happens. This is what Qdos provided in their review.

You should spot that one yourself. And it's "reasonably unfettered".

It's down to the wording that is used. Qdos suggested removing the ambiguity and explicitly making the clause accurate.

We've answered that one many times. What is the answer?

You should know. At the time, though, there was considerable debate in the contracting world, which was something that I discussed with Qdos at the time that they did the review.

Irrelevant, actually. Some roles demand that you be on site; if everyone has to be this doesn't matter.

Incredibly relevant. In a role which doesn't demand that you are on site (as was the case for that contract), dictating where you do the work points towards direction and control. To suggest otherwise is foolish at best.

Actually disagree. The "consultant" is all the reference you need. The "consultant" doesn't need to be named

And if the consultant is named, then you need to make sure that the contract and schedule are clear that a substitute is acceptable. The fact that you disagree with the contract review experts shows the whole point of this argument - an enthusiastic amateur can be dangerous if they pass themselves off as an expert.

Possibly, but trivial

One of the key arguments in Dragonfly was that HMRC showed that including the term "without prior approval" was too controlling within the substitution clause. The argument put forward by HMRC was that the contractor should have control of the substitution, and if the contract stated that prior approval was required, then that wasn't the case.

Hardly a trivial point, but one that a keen amateur would miss.

Possibly but don't actually see how since none of those ought to apply to contractors anyway; you charge fees for services rendered and time worked.

That was the Qdos argument. If you have a clause in the contract which includes employee-type benefits, then you run the risk of being seen as an employee.

Meh. This is question of professional courtesy, not contractual obligation.

Utter rubbish - another amateur opinion based on no knowledge of the wording of the contract.

The original contract stated "The supplier shall be entitled to suspend the Services for any periods during which the Supplier is obliged to allow the Representative time off in order to comply with the Working Time Regulations 1998, provided that notice of time off for annual leave for the Representative shall first be given by the Supplier to the Agency not less than 14 days prior to the relevant leave period."

That's not a matter of professional courtesy, that's a contractual obligation.

I pay Qdos to do my contract reviews and provide insurance because they provide expert advice and guidance. As you have shown in your answer, a keen amateur can be incredibly dangerous and cost you money.

[jamesbrown]

I'm more than happy for the schedule to detail who the ideal person would be to do the work, or a substitute if they aren't available.

Not a good idea to be named anywhere, under any circumstances - generic language is preferred.

[TheFaQQer]

Not a good idea to be named anywhere, under any circumstances - generic language is preferred.

Preferred by whom, and on what basis?

The expert reviewer, who provide my insurance cover, was happy for the wording, so on what basis do you think they are wrong?

[malvolio]

Well I CBA to argue. But (a) I'm not that much of an amateur that I can't hold an informed opinion and (b) some of your rebuttals are based on things that IMVHO shouldn't be in a contract in the first place. For example, how does the WTD apply to a UK Company Director; that whole clause should be deleted: but while you can include a requirement to advise the client of periods of absence to avoid unnecessary disruptions to planned work, I would argue that any contractor who doesn't give suitable advance notice of absence is likely to get done for breach anyway.

And (c) it is still an opinion, no matter how well qualified the expert. You won't get certainty without going to court.