IR35 agent games - I forgot about them

[BlueSharp]

Well a new one for me as I have not dealt with agents for a few years!


Agent: Yes the role is outside IR35
Contract: Looks outside IR35, no mention of IR35 determination (small alarm bell). Obv request the determination.
Determination sent : inside IR35.
Agent intends to pay Ltd Co invoices without operating PAYE or umbrella but with lots of indemnity clauses I will be liable for tax if HMRC come after them

Push back on agent stating my day rate for inside is x + 25% this or remove the tax clauses.

Not sure what else to do, more than happy to walk over it.

Thoughts?

[northernladuk]

So just engage with an umbrella and get the agent to pay the brolly. It's not up to the agent to operate the brolly, that's your responsibility.

[BlueSharp]

So just engage with an umbrella and get the agent to pay the brolly. It's not up to the agent to operate the brolly, that's your responsibility.

I'm not to bothered about running an inside IR35 role via My Co or engaging a brolly, what I am bothered about is agreeing an outside rate with me then switching it to an inside position!

[eek]

They aren't going to remove the tax indemnity clause because if they can't get you to pay the bill it costs them nearly 100% of your fee to fix the issue.

[jamesbrown]

They aren't going to remove the tax indemnity clause because if they can't get you to pay the bill it costs them nearly 100% of your fee to fix the issue.

It amuses me that agents think they are safe by adding these clauses. If these contractor companies disappear (which is quite likely when switching between inside and outside roles), they are very much in the firing line.

[northernladuk]

I'm not to bothered about running an inside IR35 role via My Co or engaging a brolly, what I am bothered about is agreeing an outside rate with me then switching it to an inside position!

Nothing you can do and is now standard agency practice. Advertise as outside, get you in and then drop a bombshell on you. They can do this right up to the first payment which could be in the worst case up to 60 days after you started. We've a couple of threads on here of people in exactly that position. You've dodged a bullet by finding out early. Welcome to the new world of contracting.

[BlueSharp]

It amuses me that agents think they are safe by adding these clauses. If these contractor companies disappear (which is quite likely when switching between inside and outside roles), they are very much in the firing line.

The only way I can see it working is if they withhold the last payment due to IR35 status changes part way through the contract. Contractually beyond that they would have to prove a loss to the court (pay the tax bill) and show they acted in good faith (provide an inside determination that was ignored) for it to be enforceable in the court. That's ignoring a whole host of reasons why such a term would be unenforceable, at which point there is a good chance the client co will have no money it in...

Anyway, it was all a 'mistake' and I'm getting sent the correct determination in the next few days...

[northernladuk]

Anyway, it was all a 'mistake' and I'm getting sent the correct determination in the next few days...

I'd be worried if a client deemed inside then outside. The only reasons they'd do this is if they don't really know what they are doing or there is pressure to fudge it outside by agent/contractor. Either way it doesn't sound very safe to me and could still change by the first invoice payment date.

[eek]

Nothing you can do and is now standard agency practice. Advertise as outside, get you in and then drop a bombshell on you. They can do this right up to the first payment which could be in the worst case up to 60 days after you started. We've a couple of threads on here of people in exactly that position. You've dodged a bullet by finding out early. Welcome to the new world of contracting.

First payment from the end client to the agency - that can easily be 120 days after you started work (monthly billing, 90 day payment terms to the agency).

[BlueSharp]

First payment from the end client to the agency - that can easily be 120 days after you started work (monthly billing, 90 day payment terms to the agency).

Fortunately this is 7 day payment terms and 7 day self billing linked to a timesheet so limited risk there. I do think there is a mistake on the determination as they agreed they would not challenge any substitute I sent but then said they would pay them direct rather than via my co! Flip that to a no and it comes out as outside. How would providing a substitute to be paid direct by the client work in practice anyway?