Agency Opt Out lies

[tractor]

Currently negotiating a contract and the agent (who I don't think is a member of REC or APSCO) are trying to play hardball over opting out. I like the role, it's a good rate, close to home and long term. I do not wish to opt out. If it wasn't a good role, I would have told him to p off already.

I am getting the usual lies from them (I've been contracting for decades so it's like water off a duck's back) but for two points I need to shoot them down over (Point 2 being the biggest) ...

1. They claim the PCG advises that opting out is a pointer in your favour with regards to IR35. The PCG guidance does state that but it does not state that not opting out is a pointer to inside IR35. This one I can deal with.

2. I read all over the fora and the web that the 'consensus of opinion' is that not opting out is neutral as far as IR35 is concerned and I am sure that I read that is HMRC's published view also. The sticky is 37 pages of opinion, counter opinion, argument, misunderstanding, PCG advertising/bashing. Trying to re-familiarise myself with it to answer the question, by page 9 I was ready to rip my own eyeballs out with a ballpoint!!! I am not interested in the consensus of opinion. I want to hit him with facts.

Can anyone point me in the direction of any HMRC advice/FAQ on the matter? I have trawled their site but cannot find anything and google turns up nothing relevant.

This particular agent is more of a spcialist s/w house (PMO suites) than an agent so it is likely that they understand absolutely nothing about it and are simply repeating the lawyer's mantra. I do doubt that though because the MD is either repeating it verbatim or he knows what he claims is bull.

In any event, I have already been introduced so any opt out would be invalid, but he either doesn't know this or he thinks everyone who is not an agent is stupid. It would just be nice to go back to him quoting HMRC saying the opposite of his lawyers

[Wanderer]

Yep, I've had one like this recently too. Claimed that no contractor has ever opted out, etc, etc. I won in the end but they tried some incredible lines of bulltulip on me.

I want to hit him with facts.

The only fact to hit them with is the fact that you have chosen not to opt out and Agency Regulations Section 32(13) states: Neither an agency nor an employment business may make the provision of work-finding services to a work-seeker which is a company conditional upon the work-seeker, and the person who is or would be supplied by the work-seeker to carry out the work, entering into and giving notice of an agreement as referred to in paragraph (9) to the agency or employment business.


They will wail and scream about IR35 but DO NOT enter into a debate with them about the opt out or how it may impact your IR35 status. Thank them for their concern, tell them that it's nothing to do with them, you have chosen to not opt out and that is the end of the discussion. Just keep repeating that statement to them.

Then tell them to strike out all references to the opt out from the contract and return the contract for your signature.



If they try to screw you over then report them:

1. Employment Agency Standards Inspectorate [email protected]
2. REC (if the agency is a member)
3. PCG [email protected] (if you aren't a PCG member, consider joining too)

If they try to claim that they are NOT acting as an Employment Agency or Employment Business (which is dodgy ground because they could be committing a criminal offence if they get this wrong) then tell them that since they aren't acting in the capacity, the regulations don't apply so there is no need to mention them in the contract.

Good luck and be strong!

[dty]

Agency Opt Out lies

Your IR35 status and the risks you are/aren't prepared to take surrounding it are none of their business. Make sure they understand that.

[tractor]

Yep, I've had one like this recently too. Claimed that no contractor has ever opted out, etc, etc. I won in the end but they tried some incredible lines of bulltulip on me.




The only fact to hit them with is the fact that you have chosen not to opt out and Agency Regulations Section 32(13) states: Neither an agency nor an employment business may make the provision of work-finding services to a work-seeker which is a company conditional upon the work-seeker, and the person who is or would be supplied by the work-seeker to carry out the work, entering into and giving notice of an agreement as referred to in paragraph (9) to the agency or employment business.


They will wail and scream about IR35 but DO NOT enter into a debate with them about the opt out or how it may impact your IR35 status. Thank them for their concern, tell them that it's nothing to do with them, you have chosen to not opt out and that is the end of the discussion. Just keep repeating that statement to them.

Then tell them to strike out all references to the opt out from the contract and return the contract for your signature.



If they try to screw you over then report them:

1. Employment Agency Standards Inspectorate [email protected]
2. REC (if the agency is a member)
3. PCG [email protected] (if you aren't a PCG member, consider joining too)

If they try to claim that they are NOT acting as an Employment Agency or Employment Business (which is dodgy ground because they could be committing a criminal offence if they get this wrong) then tell them that since they aren't acting in the capacity, the regulations don't apply so there is no need to mention them in the contract.

Good luck and be strong!

Thanks for the detailed post. I have successfully and quite easily refused to opt out of every contract since the agency conduct regs came into force simply by doing as you say . That is not the issue.

I am sorry, it was 1am when I posted. I just read my post back and I see where I went wrong. I missed the most important point.

I seem to remember reading, and I am sure that it was here, that HMRC themselves say that Opt Out status is a neutral pointer. That is the reference that I am looking for and I really don't want to wade through 37 pages of the sticky, I just hoped someone else would remember it and be able to point me straight there. (or tell me I was imagining the whole thing)

[malvolio]

What the others have said. Your status re the Regs is none of their concern and cannot be a condition of the contract. However the contract has to recognise your status since some clauses will be different between normal and opted-out positions.

PCG's advice is that you use the opt out to negotiate a better contract since you are saving the Agency time and money (a clue as to why they always push for you to opt out) but it is totally irrelevant to IR35, a position supported by HMRC and BIS (who are the real authority in question).

PCG's detailed guidance is here Have a careful read. If you are a member (and if not why not...) then a word with the legal helpline may be useful.

[tractor]

...

What the others have said. Your status re the Regs is none of their concern and cannot be a condition of the contract. However the contract has to recognise your status since some clauses will be different between normal and opted-out positions.

PCG's advice is that you use the opt out to negotiate a better contract since you are saving the Agency time and money (a clue as to why they always push for you to opt out) but it is totally irrelevant to IR35, a position supported by HMRC and BIS (who are the real authority in question).

PCG's detailed guidance is here Have a careful read. If you are a member (and if not why not...) then a word with the legal helpline may be useful.

The above is what I am interested in. Not some commentator claiming it I want the reference and I cannot find it, that is why I posted here. The only reason.

But while we are on the subject, it is partly the PCG advice document that causes this problem - it actually STATES that opting out can be a minor pointer away from IR35. Agents are spinning this into 'not opting out is a major pointer to inside IR35' (I will send the spin to PCG later today so that they can see for themsleves) IMO the reference should be completely removed from the PCG document.

Please no more advice, I don't want this to turn into another sticky of 30 more pages where no one can find the point of it. - I really do know that I don't want to opt out, no, really! And I know why. I have always not opted out and always will. I will never willingly give away any financial protection, that would be plain stupid unless you really are in a supply arrangement without the presence of a lying agent.

I just need the reference that all commentators are happy to quote but never to refer, where the Revenue actually state that Opt Out status is neutral as far as IR35 is concerned.

[malvolio]

The above is what I am interested in. Not some commentator claiming it I want the reference and I cannot find it, that is why I posted here. The only reason.

But while we are on the subject, it is partly the PCG advice document that causes this problem - it actually STATES that opting out can be a minor pointer away from IR35. Agents are spinning this into 'not opting out is a major pointer to inside IR35' (I will send the spin to PCG later today so that they can see for themsleves) IMO the reference should be completely removed from the PCG document.

Please no more advice, I don't want this to turn into another sticky of 30 more pages where no one can find the point of it. - I really do know that I don't want to opt out, no, really! And I know why. I have always not opted out and always will. I will never willingly give away any financial protection, that would be plain stupid unless you really are in a supply arrangement without the presence of a lying agent.

I just need the reference that all commentators are happy to quote but never to refer, where the Revenue actually state that Opt Out status is neutral as far as IR35 is concerned.

Fair enough, but it's not HMRC saying it, it's BIS. They have a unit dedicated to the Agency Regs, perhaps you should be asking them as well...

[tractor]

...

What the others have said. Your status re the Regs is none of their concern and cannot be a condition of the contract. However the contract has to recognise your status since some clauses will be different between normal and opted-out positions.

PCG's advice is that you use the opt out to negotiate a better contract since you are saving the Agency time and money (a clue as to why they always push for you to opt out) but it is totally irrelevant to IR35, a position supported by HMRC and BIS (who are the real authority in question).

PCG's detailed guidance is here Have a careful read. If you are a member (and if not why not...) then a word with the legal helpline may be useful.

Fair enough, but it's not HMRC saying it, it's BIS. They have a unit dedicated to the Agency Regs, perhaps you should be asking them as well...

Do you see why people get confused???

If I am only remembering commentators unsubstantiated claims and assumptions, then I am wasting my time. I will go to the BIS site and look again. And I would probably argue the point over whether BIS are the authority when it comes to taxation and IR35 matters.

[TheCyclingProgrammer]

This seems to be a regular story on here. We should all know by now that at best opting out is a minor pointer towards being outside IR35 and like many "minor pointers" the converse is not necessarily true; not opting out is not a pointer towards being inside.

Like mal said, I believe the PCG recommend considering opting out if it can be used to negotiate a better contract. I've only done two contracts through an agency in the last 5 years; one was forced as my client had a preferred suppliers list and the other time I insisted on not opting out I ended up being called by the agency's financial director (!) to discuss the merits of me opting out. I honestly can't remember if I gave in or not in the end.

In short, if you want to stay opted in, I wouldn't mention it up front. I'd wait until you've got a decent IR35-friendly contract in your hands (it might even have a file name like "Agency Contract - Opted Out") and once you've had it reviewed and are happy, tell the agency that you aren't opting out. They'll throw their toys out of the pram and try and get you to sign a different contract. At this point you tell them you're quite happy with the contract they've already been sent, having taken the time and expense to have it professionally reviewed and are ready to start. Ideally you'll tell them this right before the contract starts. Its up to them if they want to jeopardise things over the opt out.

As Wanderer said: don't try and engage in a conversation about IR35 with them. Its none of their concern and they don't know what they are on about anyway.

Needless to say I don't envy all of you who have to deal with agencies on a regular basis and thank goodness for the PCG and their ready to go consultancy contracts!

Lots of similar stories here:
http://forums.contractoruk.com/busin...-2003-act.html

[northernladuk]

You could point out to them that your IR35 status is your concern not theirs. You appreciate their comments on it but please drop any further discussion on IR35 and deal with the matter in hand.