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Outside IR35 Contract advice please

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    Outside IR35 Contract advice please

    Hi everyone,

    First post on the forums, so be gentle

    I've been reading through this particular forum to try and get most of the answers to questions I had and pleased to say i've found the majority so thank you to the main contributors to previous posts. I'm still seeking some advice so hoping someone can help, I understand given the reform is very new to the private sector the answers just might not be available right now but here goes.

    Bit of background first. I've been contracting with my current client for 2 years in Feb, previously via a 3rd party agency they used mainly for the payroll and admin purposes. Back in Jan I was able to secure an outside determination with the client for a new contract to take me from reform date up to the end of 2021.

    The intention of the client was that I was still to contract via the agency, however on seeing the new agency contract in which they have made my ltd co indemnify them for all and every cost resulting in any tax non-compliance regardless of fault i've refused to renew (They wouldnt change the clauses despite me calling out that I was more than happy for my co to indemnify them and the end client for non-compliance on my part).

    My refusal to renew on those contract terms, and their refusal to change the clauses has pushed the end client to take them out of the loop! great news on the face of it.

    So to the advice I seek, like many end clients their knowledge of IR35 even with the reform is extremely limited, i'm working directly with their procurement team on the contract and they are requesting we collectively sign the following docs -

    - Statement of Works - to be created by my Co and outlining the details of this engagement
    - Master Service Agreement - Created by them and underpinning the services my company provides
    - Services Schedule - Created together and supporting the MSA

    Having reviewed the first drafts and created the SoW myself none of the documents currently include what I would deem standard outside of IR35 clauses, such as substitution. The Procurement Manager I am dealing with has advised that their external lawyers are adding some IR35 clauses which I should see this week, this is making me quite nervous, i'm not really sure where these clauses should sit, should I add them to the SoW or expect them to be in the MSA?

    I've previously used QDOS for contract reviews, but their current services arent really relevant for post reform in my opinion. I've seen Merkel Tax mentioned as a potential resource for reviews, has anyone any similar experience which they can pass on?

    Should I be the one worrying about it given the reform puts the onus on the client? I generally wouldnt bury my head in the sand so this approach wouldnt sit comfortable with me, but I just dont know where the land lies now.

    I have an SDS and a copy of the client outside CEST from the Jan exercise.

    Thanks for taking the time to read, all advice welcomed.
    Last edited by Contractor for Life; 15 April 2021, 08:25.

    #2
    Technically if they've provided an SDS then the risk lies on them and you are in the clear. I would be very nervous with your two years though. Not many single assignments last two years and and endless new SOW's can start to look like a paperwork exercise over time. If you were a PM for example, and they just created a statement of work for every new gig every time they gave you a new project it would be quite right to ask why a permie isn't doing it. The most recent SOW's start to look like just paperwork to keep a bum on a seat rather than a real engagement to fill a requirement they don't have in the prem resource pool.

    I'd also question if the SDS has been done to keep you on site or a is a realistic representation of the situation. Part and parcel is always a problem on long gigs and that applies to both sides.

    But, at the end of the day, if the client gives you an SDS the risk is on them.

    I'm surprised QDOS's offering doesn't suit the new situation. They know more than enough about everything that is going on and they should be eager to take your money so I am sure the should be able to look at the CEST and paperwork and give their opinion of the situation. Did you actually speak to them or are you just surmising from their blurb?

    Where are the clauses about payment dates and notice periods? The substitution should be in there.

    I'd definitely give QDOS a call and check what they can offer.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Thanks for the advice Northernlad

      I used the QDOS contract Health Check service to review the agency contract (which I declined to sign) but that only put the contract into plain english for me and couldnt advise on amendments etc, which in itself was helpful as it confirmed my fears about the indemnity clauses.

      Their IR35 review doesnt seem relevant now the reform has kicked in, I did call them to discuss the request but what I was after was a full contract review (wider review than IR35) with advice on clause amendments if required. However that was all around the original agency contract which is no longer relevant so I'll make another call to them.

      Because I read about Merkel, I wondered if this was a more comprehensive commercial contract review service that might be more appropriate.

      "Where are the clauses about payment dates and notice periods? The substitution should be in there."

      These are in the MSA so thats where i'll look to ensure they are added.

      Comment


        #4
        I'm not sure that IR35 is the most relevant part of this contract, tbh. If they are trying to create a true B2B relationship via procurement then what they are asking for is entirely reasonable, and is the same as I have used a few times myself. Questions of employement simply don't arise.

        Perhaps use Merkle Tax for a review since they will look at the whole commercial contract, not just the IR35/Section 10 elements. Discounts for IPSE members incidentally.

        Blog? What blog...?

        Comment


          #5
          The IR35 clauses need to be in the MSA.

          QDOS do have some sample IR35 friendly contracts with all the necessary clauses in. You can download them here:
          https://www.qdoscontractor.com/ir35/...ract-templates

          If you select the 'Direct with end client' template, the key IR35 status clauses are as follows:

          Personal Service/Substitution - clauses 2.2-2.5
          Supervision, Direction or Control - clause 7
          Mutuality of Obligation - clause 15

          Other Areas Considered:
          Financial Risk - clause 17
          Length of Engagement as per schedule
          Non-Exclusivity - clause 2.7
          Intention of Parties - clause 7.3
          Contractor Termination Provisions - clause 11

          You could either send this contract to the client as a template, or when you receive their amended contact check that it's got the essentials.

          Comment


            #6
            It's probably advisable that they are - unless you think having employee-related clauses might be a potential problem in a B2B contract, where issues such as substitution don't arise...

            Incidentally, as for repeated SoWs, how else would you handle a continuing engagement with several separate deliverables.

            "Don't let the tax tail wag the business dog" as someone wise said a while ago.
            Blog? What blog...?

            Comment


              #7
              Thanks all really good advice

              Comment

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