IR35 win for HMRC

[shoes]

One for the legal elves, I think.

I thought they were elves. Im glad I'm not alone in this. Eagles are just not smart enough. Owls would be ok though.

[WotNxt]

I did get that point - really.

What I was getting at is that it's better to get something put into one's contract that gets around it. Now, how that's done is beyond my ken, but there must be a way of making it clear that in such a "chain", you will only be responsible for that which you have seen and signed. And that obviously wouldn't include any sort of "Eyes Only" contract between pimp & Client.

One for the legal elves, I think.

I have had many contracts put in front of me that have specific clauses stating that taxes are MyCo's responsibility and that I will not claim any additional taxes from the agency and client. These clauses I think were originally designed for another purpose (not sure which prior tax legislation that was - s135 perhaps?) but work quite nicely, I'm sure, to indemnify the client and agency against the effects of IR35.

Part of the current problem is the one-sidedness of the contractor-agency contract. The agencies just bully us into accepting their contract as is with no amendments/negotiation possible. The usual excuses are IME:

i) ignorance about the legal aspects and cannot change
ii) need legal department to look at it and the answer still always comes back as "no changes" - pretty certain this is just a lie and a delaying tactic to put you under pressure to accept
iii) client will not accept the same changes in their back to back contract with the agency

I have tried all sorts of tactics to get them to budge and have even turned down a contract extension because it would have brought me inside IR35 (without a doubt!). Even though the client wanted me to stay the bods on the ground didn't have enough sway to get anything done. They even asked me back a few months later so I quoted them two rates, one on their contract terms (which I had already rejected) and one on mine. They said they couldn't accept my contract terms (not enough influence) and couldn't stand the higher rate (for working inside IR35) that I was quoting for their terms. So again I declined. I don't think it made a jot of difference to the overall situation for contractors. It was water off a ducks back for the agency (Spring) and the only people that suffered (potentially) were the local managers who lost a resource they wanted to keep.

I have also tried paying for a contract reviewed and amended by well respected legal expert and then using that as a starting point for negotiating contractual changes. Again the agency completely refused to change anything and though I would back down at the last minute. I think that agency had some egg on their face as they had told the client I would be accepting and had to tell them at the last minute - due to their brinkmanship - that I declined. However, they probably just spun this as me being unreliable/lying to them/getting another contract - "bloody contractors, eh!".

Maybe some of you guys can pick and choose your agencies and clients, rates and contract terms, but most of us probably cannot and still get the rough end every time.

The PCG offers some hope here and I think is our only hope to improve things for contractors. It is never going to happen overnight but as long as they keep chipping away then it is a good thing. For all their faults (and all such organisations have many) they are the only real voice for contractors and they have and are making a difference.

[Burdock]

I have had many contracts put in front of me that have specific clauses stating that taxes are MyCo's responsibility and that I will not claim any additional taxes from the agency and client. These clauses I think were originally designed for another purpose (not sure which prior tax legislation that was - s135 perhaps?) but work quite nicely, I'm sure, to indemnify the client and agency against the effects of IR35.

Part of the current problem is the one-sidedness of the contractor-agency contract. The agencies just bully us into accepting their contract as is with no amendments/negotiation possible. The usual excuses are IME:

i) ignorance about the legal aspects and cannot change
ii) need legal department to look at it and the answer still always comes back as "no changes" - pretty certain this is just a lie and a delaying tactic to put you under pressure to accept
iii) client will not accept the same changes in their back to back contract with the agency

I have tried all sorts of tactics to get them to budge and have even turned down a contract extension because it would have brought me inside IR35 (without a doubt!). Even though the client wanted me to stay the bods on the ground didn't have enough sway to get anything done. They even asked me back a few months later so I quoted them two rates, one on their contract terms (which I had already rejected) and one on mine. They said they couldn't accept my contract terms (not enough influence) and couldn't stand the higher rate (for working inside IR35) that I was quoting for their terms. So again I declined. I don't think it made a jot of difference to the overall situation for contractors. It was water off a ducks back for the agency (Spring) and the only people that suffered (potentially) were the local managers who lost a resource they wanted to keep.

I have also tried paying for a contract reviewed and amended by well respected legal expert and then using that as a starting point for negotiating contractual changes. Again the agency completely refused to change anything and though I would back down at the last minute. I think that agency had some egg on their face as they had told the client I would be accepting and had to tell them at the last minute - due to their brinkmanship - that I declined. However, they probably just spun this as me being unreliable/lying to them/getting another contract - "bloody contractors, eh!".

Maybe some of you guys can pick and choose your agencies and clients, rates and contract terms, but most of us probably cannot and still get the rough end every time.

The PCG offers some hope here and I think is our only hope to improve things for contractors. It is never going to happen overnight but as long as they keep chipping away then it is a good thing. For all their faults (and all such organisations have many) they are the only real voice for contractors and they have and are making a difference.

Very interesting post WotNxt. I got my last contract reviewed, and after a lot of aggro, the agency agreed to insert some clauses into my contract. I'm pretty sure they didn't change their contract with the client though.

I was hoping I would at least be able to get my contract with the agency amended in future roles, very worrying to hear that many won't do this.

What a mess the whole 3-legged triangle is

[Mailman]

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].

You go to a employment tribunal only to be told you arent and have never been an employee of the company!

Wouldnt this be the ideal situation to be in? HMRC saying you are an employee BUT the employment tribunal saying you arent?

Mailman

[The Lone Gunman]

You go to a employment tribunal only to be told you arent and have never been an employee of the company!

Wouldnt this be the ideal situation to be in? HMRC saying you are an employee BUT the employment tribunal saying you arent?

Mailman

I believe we need this situation to occur and then for the person with the two decisions to ask for a judicial review of the situation.
It is more complicated than that but that is the way forward IMHO.

[WotNxt]

I believe we need this situation to occur and then for the person with the two decisions to ask for a judicial review of the situation.
It is more complicated than that but that is the way forward IMHO.

This has already arisen I believe - the Battersby case? It makes no difference to have two apparently contradictory decisions because they are not, in fact, contradictory. Tax law and employment law are separate and the decisions apply to each part of the law without reference to the other.

The only way to change this will be via new/altered legislation to harmonise the two. Don't hold your breath waiting for this though.

[Dark Black]

Very interesting post WotNxt. I got my last contract reviewed, and after a lot of aggro, the agency agreed to insert some clauses into my contract. I'm pretty sure they didn't change their contract with the client though.

Likewise I had my current contract reviewed by a wellknown company that specialises in such things, they negotiated with the pimp on my behalf and together with some information I supplied relating to actual working practices at the clients we managed to get the contract changed for a proper project-based supply contract.



Moral of the story - if not happy get your contract reviewed and keep pestering...