Most contracts being advertised as Outside IR35 - Azure/Cloud Consultant

[cojak]

what do you mean by the client "hitting the agent" and "in turn hitting you"?

If the changes go ahead then at least one thing is crystal clear, the onus is on the client. I don't see how they can hit you, so to speak, in any way following April 1st. This sounds like speculation.

This sounds like you haven’t been here for long...

Hello,

I am the director of my own business providing specialist IT services. The location where the services are carried out and the way in which they are carried out is not determined by the agency or the client.

The agency contract which I am being asked to sign includes the following paragraph:

"The Company (i.e. my company) shall indemnify and keep indemnified the Employment Business (i.e. agency) and the Client against any Losses suffered or incurred by the Employment Business or the Client by reason of any proceedings, claims or demands by any third party (including specifically, but without limitation, HM Revenue and Customs and any successor, equivalent or related body) pursuant to the IR35 Legislation, ITEPA or the NICs Legislation and/or any supporting or consequential secondary legislation relating thereto)."

I challenged this as being unreasonable. The response was
"It is the Company who engages or employs the Contractor and/or any Substitute and make any necessary payments to them, any claim arising out of such instances is the responsibility of the Company"

What is the view on the level of risk that I expose my company to by accepting this term and signing the contract?

Thank you,
Mike.

[JamesBrown11]

what do you mean by the client "hitting the agent" and "in turn hitting you"?

If the changes go ahead then at least one thing is crystal clear, the onus is on the client. I don't see how they can hit you, so to speak, in any way following April 1st. This sounds like speculation.

I've seen contracts (from two different agencies) that included "IR35 Indemnity" clause. By signing the contract you agree to protect the end-client and agency from any employment/IR35 related tax liability.

People have been telling me that this is not enforceable as end-client cannot transfer liability to another party, but who knows. I would prefer not to have such clause in the first place.

[pscont]

I've seen contracts (from two different agencies) that included "IR35 Indemnity" clause. By signing the contract you agree to protect the end-client and agency from any employment/IR35 related tax liability.

People have been telling me that this is not enforceable as end-client cannot transfer liability to another party, but who knows. I would prefer not to have such clause in the first place.

Chances of me signing a contract with such a clause are pretty slim indeed.

[JohntheBike]

Chances of me signing a contract with such a clause are pretty slim indeed.

you cannot sign away any of your statutory rights.

[Paralytic]

you cannot sign away any of your statutory rights.

Whilst I agree with the principal that a client/agency should not be able to simply pass on any risk via a clause in the contract, what specific rights are being signed away, given this is a business to business contract?

[ComplianceLady]

With regard to the 'Okay fine it's outside IR35' scenario. My experience is many roles are inside IR35 because the client is unwilling to flex on certain things. Where the skill set is niche the desire to flex will be higher and thus the role status will change because the client changes the role. We are advising clients you have to flex on either: 1. resource - get less resource, less skill etc. 2. Cost - pay consultancy, increase rates etc. or 3. Working arrangements - engage in a truly B2B manner and you can get the same resource at the same cost.

With regard to the contract issue - you can indemnify another party against their statutory liability but you cannot take on the liability directly so it would work where agency is found liable, pays statutory liability and invoices PSC, depending on the structure of the clause they may have to demonstrate loss, cause or nothing at all. If the PSC doesn't exist when the liability arises they have no recourse, similarly if there are no assets. These clauses are, in my view, not worth inclusion. If an agency is genuinely concerned they should get insurance.

[rockinghorse]

ERP / Business Central or CRM / CE / Powerapps?

all of the above

[JohntheBike]

Whilst I agree with the principal that a client/agency should not be able to simply pass on any risk via a clause in the contract, what specific rights are being signed away, given this is a business to business contract?

clearly I can't see the details of the contract. The point I'm making is that if there are statutory regulations in place to cover any agreement, then these can't be signed away. So, e.g. if there is an existing contract between two parties, then if one party is allowed to continue after that contract expires without a new contract, then contract statute dictates that the previous contract is still in force.

[dsc]

We are advising clients you have to flex on either: 1. resource - get less resource, less skill etc. 2. Cost - pay consultancy, increase rates etc. or 3. Working arrangements - engage in a truly B2B manner and you can get the same resource at the same cost.

From your experience, roughly, what's the percentage spread across all three flex options? I kind of have a feeling not a lot of companies go for option no 3, which to me is the simplest (also the one which I think a lot of companies have a problem with for some reason).

[ComplianceLady]

From your experience, roughly, what's the percentage spread across all three flex options? I kind of have a feeling not a lot of companies go for option no 3, which to me is the simplest (also the one which I think a lot of companies have a problem with for some reason).

At the moment I'd say most - maybe 60% are going with flex on resource - risking losing contractors or gambling on not losing them, 30% are flexing on working arrangements, this tends to be quite sector dependent - some sectors all clients are flexing on this, some none are, and 1 in 10 is increasing rates but no one by more than 5%. I think rates will increase but there's a reluctance to attribute it to this directly.