IR35 win for HMRC

[VectraMan]

Which makes me wonder, because most agencies do not allow the contractor to see this contract would it be possible to put a clause in the contractor/agency contract that if the agency enter into/sign any related contracts (aka agency/client) that contradict clauses in the contractor/agency contract that the agency would be liable for any costs that this might impose on the contractor (aka getting IR35 caught)?

Good thinking. But is there an issue because it's tax? Much like you can't sign away your employee rights, surely you can't have an agreement that says somebody else will cover your tax bill (and if you did, that would count as extra income and be taxed). I.e. it's not really a cost resulting, it's what you should have legally done in the first place.

[Not So Wise]

Not really because argument is you entered a contractor/client agreement, agency by entering a different agreement turned that relationship in to a an employee/employer agreement. By redefining that agreement without your permission (and in most cases your knowledge until to late) they owe you the extra costs incurred, that fact that these costs are taxation would be immaterial

But because the agency could get hit with not only the extra taxation but also legal fee's of the contractor fighting the case the clause would probably have to have a cap on costs, basically the difference between IR35 caught and not IR35 caught

[The Lone Gunman]

As I said above, one day somebody will take the agent and the client to court over this. The agent for sure and possibly the client is guilty of gross misrepresentation if not fraud.

The contractor in this case should be taking the client to court to recover unpaid employee benefits. The statement they made in court will be useable as evidence in an employment status hearing (as opposed to a tax status one). Holiday pay, sick pay, pension rights and maybe unfair dismisal too.

Could the contractor in this case go bankrupt and suggest HMRC go up the recovery chain to the employer for the missing tax?

There are so many avenues to legaly explore here. What we need is a contractor with nothing left to lose and fit enough for battle.

[Burdock]

As I said above, one day somebody will take the agent and the client to court over this. The agent for sure and possibly the client is guilty of gross misrepresentation if not fraud.

The contractor in this case should be taking the client to court to recover unpaid employee benefits. The statement they made in court will be useable as evidence in an employment status hearing (as opposed to a tax status one). Holiday pay, sick pay, pension rights and maybe unfair dismisal too.

Could the contractor in this case go bankrupt and suggest HMRC go up the recovery chain to the employer for the missing tax?

There are so many avenues to legaly explore here. What we need is a contractor with nothing left to lose and fit enough for battle.

[Lockhouse]

As I said above, one day somebody will take the agent and the client to court over this. The agent for sure and possibly the client is guilty of gross misrepresentation if not fraud.

The contractor in this case should be taking the client to court to recover unpaid employee benefits. The statement they made in court will be useable as evidence in an employment status hearing (as opposed to a tax status one). Holiday pay, sick pay, pension rights and maybe unfair dismisal too.

Could the contractor in this case go bankrupt and suggest HMRC go up the recovery chain to the employer for the missing tax?

There are so many avenues to legaly explore here. What we need is a contractor with nothing left to lose and fit enough for battle.

A good post - but who would pay for the contractor to take it further?

[Numptycorner]

5 years on one site, no wonder he lost. They already have the 24 month rule which hints how far to push it.

[The Lone Gunman]

A good post - but who would pay for the contractor to take it further?

The PCG obviously.

[Sockpuppet]

There are so many avenues to legaly explore here. What we need is a contractor with nothing left to lose and fit enough for battle.

I've got nothing to start with. Hows about it.

[ASB]

As I said above, one day somebody will take the agent and the client to court over this. The agent for sure and possibly the client is guilty of gross misrepresentation if not fraud.

That is at least questionable. It was discussed a bit in this thread http://forums.contractoruk.com/threadnav19423-4-10.html malvolio did pretty much persuade me it was misrepresentation, but I still think it would be an almost impossible hurdle to jump to be able to prove loss because of it.

The contractor in this case should be taking the client to court to recover unpaid employee benefits. The statement they made in court will be useable as evidence in an employment status hearing (as opposed to a tax status one). Holiday pay, sick pay, pension rights and maybe unfair dismisal too.

They could take them to a tribunal in order to try and prove they were an actual employee of the client. I would imagine that is doomed to failure due to the lack of contractual nexus but one never knows. [Muscat did win though, but that had some very unusual circumstances].

[The Lone Gunman]

That is at least questionable. It was discussed a bit in this thread http://forums.contractoruk.com/threadnav19423-4-10.html malvolio did pretty much persuade me it was misrepresentation, but I still think it would be an almost impossible hurdle to jump to be able to prove loss because of it.

The intention is not to prove loss, it is to prove that a crime has been commited. The intention is to get the agent and the client thrown in jail (or at least threatened with it). Too may agents and clients are colluding to avoid employment status problems by entering into fraudulent contracts.

Obtaining goods or money by deception is against the law. Our supplied services constitute the "goods" in question. The deception is in the unmatched contract clauses which the agent knew about and the client might have.

They could take them to a tribunal in order to try and prove they were an actual employee of the client. I would imagine that is doomed to failure due to the lack of contractual nexus but one never knows. [Muscat did win though, but that had some very unusual circumstances].

I am proposing this to bring this absurd disparity between employment status and tax status to a head. If there is no nexus then there can be no employment status and therefore no tax status either, but untill someone goes to the Lords with a tax ruling saying they are an employee and an employment ruling saying they are not then we will remain in limbo.

It is not just about winning, sometimes we need a loser to flag up the injustice.