New contract within IR35 by default?

[Qdos Contractor]

Who and how exactly will check working practises BEFORE the contract/work has started?

If the contract wording is you can work wherever (home/office), whenever (not 9-5), however (methods of work), you will supply your own equipment, don't have holidays, or any other perks, what else is needed?

Out of interest.

Obviously doing a working practices review prior to starting a contract isn't going to give the full picture, but it will cover some of the more general business practices and possibly factors you know are going to apply to your specific role/industry.

If someone has a working practices review prior to inception of the contract, we would always suggest that they are revisited once the work has actually started.

[FatLazyContractor]

FAO Mods.. It appears SU's account has been hacked. Can we temporarily suspend it until he posts something along the normal lines so we know it's him?

[GB9]

I think hoping that one pillar will put you in the clear is a very risky approach. The best approach is to have as many covered as you can and a whole raft of supporting evidence.. i.e. you do things properly so you are a supplier, not a permatractor looking for an easy out.

Agree, the more covered bases the better, although there is some case law that states if 'x' applies ghen there cannot be employment.

[northernladuk]

Obviously doing a working practices review prior to starting a contract isn't going to give the full picture, but it will cover some of the more general business practices and possibly factors you know are going to apply to your specific role/industry.

If someone has a working practices review prior to inception of the contract, we would always suggest that they are revisited once the work has actually started.

I would guess you can cover some fairly major discrepancies though. Your contract is between agent and your limited. I'll bet most cases where you get something changed, particularly around RoS, the agent doesn't confirm it with the client. If the client doesn't know or doesn't agree then your working practice has immediately trashed your contract. Contacting the client to confirm that they will honour RoS before you start and some other fairly basic aspects will be pretty easy to do.

[northernladuk]

Agree, the more covered bases the better, although there is some case law that states if 'x' applies ghen there cannot be employment.

Indeed but there is also case law that has had RoS thrown out as a sham.... it's bloody minefield so diligence is key.

[GB9]

I can't imagine this would work for one minute. The agency has a gig on offer with set terms. Take it or leave it. They don't care if you are inside or outside. What you see is what you get. They aren't going to go pestering the client over rates because of your tax position.

Agree in part with this. The agency has s gig, take it or leave it.

The but I disagree with is around the tax position. That is being dictated by the client I. E. The client wants someone inside ir35 and as a result, the role holder pays more tax. If the client wanted someone outside ir35 then the role holder pays less. The client's requirement is dictating the tax rate to be paid.

This is different to e. g. the dividend tax, which is payable regardless of whether a client is involved or not.

[northernladuk]

Agree in part with this. The agency has s gig, take it or leave it.

The but I disagree with is around the tax position. That is being dictated by the client I. E. The client wants someone inside ir35 and as a result, the role holder pays more tax. If the client wanted someone outside ir35 then the role holder pays less. The client's requirement is dictating the tax rate to be paid.

This is different to e. g. the dividend tax, which is payable regardless of whether a client is involved or not.

OK, we'll have to beg to differ. The client has a requirement for some work to be done and he has a budget to cover it. That's it IMO. He doesn't have budget X for someone to be in one tax position and budget Y for someone else. He doesn't care. That's how I see it. Client is making it difficult by not understanding I agree but I just cannot see a two tiered approach to funding it just because we use a tax fudge.

[eek]

This thread is a great advertisement for the failure of gov't policy w/r to IR35. There are as many different understandings as posters

To the OP: you're wasting your time with this one. Also, FWIW, there's little point in sending a contract for review when it's a clear fail. Opinions vary on this, but my view is that you should negotiate to contract to a point that it's worth reviewing. Even if you could get the contract completely rewritten, which seems unlikely, their intention is probably to hire a temp, and the working practices would reflect that.

More generally, in terms of reviewing working practices, the best thing you can do is to discuss the working arrangements with the client (i.e. to add some colour to the contractual terms) and relay this to the reviewer, but you never really know until you've been onsite for a while, at which point you should document and re-review (informally, at least).

Although SDC has been around for decades, the case law test for control is broader than SDC (which is most closely related to the "how" element of control), and it remains to be seen how the "SDC Test" will be viewed in future case law. That being said, the interpretation of control is very well-established as being not "any" degree of control, but a sufficient degree of control. The facts are interpreted in the round to establish whether the picture is one of employment according to the degree of control ("bound hand and foot"). As others have indicated, this is only one aspect of IR35, but it's worth bearing in mind that the courts frequently differ from HMRC in their interpretation of law. In my view, SDC isn't a game changer if you pass the "how" element of an existing control test, but having the client form a judgment is a game changer, and this sort of pre-emptive behaviour by clients/agents is an early warning of that.

So far it's one very risk adverse agency implementing it. To the OP you only real option is to walk away but apologize to the end client (I.e. Call the person who interviewed you and explain that due to the unwillingness of the agency to provide an acceptable contract you can't accept the contract).

That then Gives them the chance to bin people source off their supplier list and allow you to select someone else. I doubt it would work but you never know..

[eek]

Agree in part with this. The agency has s gig, take it or leave it.

The but I disagree with is around the tax position. That is being dictated by the client I. E. The client wants someone inside ir35 and as a result, the role holder pays more tax. If the client wanted someone outside ir35 then the role holder pays less. The client's requirement is dictating the tax rate to be paid.

This is different to e. g. the dividend tax, which is payable regardless of whether a client is involved or not.

Does the client want someone under ir35 or is the agency just utterly risk adverse with a crap legal advisor?

[Eirikur]

I can't imagine this would work for one minute. The agency has a gig on offer with set terms. Take it or leave it. They don't care if you are inside or outside. What you see is what you get. They aren't going to go pestering the client over rates because of your tax position.

You are probably right, what I will try next time an agent asks me for exclusive representation (and I think my chances to get the contract are pretty small anyway) is add in the email something along the lines of "provided the contract between your agency and my Ltd will be outside IR35"