Reply to: Being supervised = inside?

[Jog On]

Are you any good and what do you charge?

My sites are doing pretty well, I’m only going into doing them for other people now. I don’t design or code (I outsource/sub that bit out as and when needed), I do SEO, marketing and Google Adword campaign management. I specialise things like keyword research, writing content that converts and getting traffic.

[TheFaQQer]

Are you any good and what do you charge?

Bob Shawaddiwadi can do good websites with plenty cheapness.

[Epiphone]

(doing a few websites for people)

Are you any good and what do you charge?

[TheFaQQer]

Thanks for all the replies folks – I have an update!

After much discussion and negotiation we have come to an agreement and I am getting the ‘outside IR35’ contract as opposed to the ‘inside IR35’ one. The agent is not happy about it because in his opinion he feels that the assignment is inside due to the amount of direction from the client – it is a support/XP/AD rollout roll. He has asked me to formally indemnify his company against any tax liabilities that could be incurred from an HMRC investigation which I am happy to do. I’ve worked with him before and we’re practically mates now.

So I am now awaiting for a PCG approved outside contract which will be consistent with the agent/client contract as well.

So I think with an outside contract, PCG cover and the fact that I am working for other clients outside of the contract (doing a few websites for people) and investing in business growth training as well as developing digital products to sell online I think I *should* be able to sleep soundly at night.

What a *%^*ing kerfuffle this IR35 nonsense is

It's got **** all to do with him about whether you pay IR35 or not. Just because he says it's caught, doesn't mean it is (and even if it is, you could choose to chance it and not pay it anyway).

An indemnity is worthless anyway, since HMRC will go after you personally rather than a company.

He sounds a bit numb to me.

[Qdos Contractor]

When you get it, check the standard alternative contract for a MOO clause (or end date). Quite often it's lacking, although substutution and control are always good.

[abirato]

Think and be informed

The agent is talking out of his nether regions :

1 While Agencies Regulations legislation is unclear on when an introduction has taken place, the received wisdom is that the point of introduction is when you have a meeting with the client to discuss if you can work together. If you have already had a meeting with the client then you are already Opted-in and the Agent is breaching the regulations by suggesting that you have to opt-out. You cannot opt-out after introduction. A gentle word suggesting that you may seek clarification from the DTI on this may get a more informed response.

2 Take control of your business. Become better informed. Suggestion - become a member of the PCG it is a great resource. Many of the members are very well-informed and will give qualified (they are not lawyers) but well-informed comment.

3 If the Agent uses the REC model contract (unusual to use it completely unmodified but possible) that is a policy choice. Equally, when a contractor raises queries and requests changes to to a contract if the Agent will not change it it is a policy choice, not a requirement of membership of REC. Many Agency contracts are modfied forms of the REC model contract.

4 It is human nature to take the easiest route to a conclusion. Asking for changes makes more work. Some agents listen and respond, others do not. My company has a policy of working with those who listen and respond. The more contractors that think and question instead of blindly accepting and signing what is offered by Agents the sooner we will have a more equitable working arrangements with agents and the more likely rates, Terms and Conditions will be to every body's benefit.

5 Most Agency contracts are written to minimise the risk to the Agent and pass on as much risk as possible to the contractor. To justify this comment I would suggest that every one of you out there looks at contracts that you have signed previously and ask yourself if you have signed up to acceptance of UNLIMITED LIABILITY in the event of anything going wrong. I would suggest that the majority of agencies have contracts written in such a way that unlimited liability is the default condition on most if not all agency contracts. If that is the case then I would suggest that your professional indemnity insurance (if you even carry it) will not cover you in those circumstances.

6 Do not assume that the agent is always right. Do not assume that Agents including their so called "legal departments" are well-informed in employment law, Intermediaries legislation (IR35), Settlements Legislation (S660 - the recent Arctic Case) - they tend to look after their own interests first not that of the contractor. I invariably find that those you speak to at the agency are less well-informed in the things that matter than I am. So many times I have been given the response "Well this has never been questioned before" (in most cases unlikely) but my response is always that just because it has not been questioned before does not make it right it just underlines how ill-informed and gullible many contractors are (or choose to be).

[Jog On]

Thanks for all the replies folks – I have an update!

After much discussion and negotiation we have come to an agreement and I am getting the ‘outside IR35’ contract as opposed to the ‘inside IR35’ one. The agent is not happy about it because in his opinion he feels that the assignment is inside due to the amount of direction from the client – it is a support/XP/AD rollout roll. He has asked me to formally indemnify his company against any tax liabilities that could be incurred from an HMRC investigation which I am happy to do. I’ve worked with him before and we’re practically mates now.

So I am now awaiting for a PCG approved outside contract which will be consistent with the agent/client contract as well.

So I think with an outside contract, PCG cover and the fact that I am working for other clients outside of the contract (doing a few websites for people) and investing in business growth training as well as developing digital products to sell online I think I *should* be able to sleep soundly at night.

What a *%^*ing kerfuffle this IR35 nonsense is

[Qdos Contractor]

As stated above, the reference to 'direction' isn't good and will cause problems. Sounds like a standard contract I've reviewed thousands of times. Check one of the termination clauses (probably 11.2.1), which essentially states that you have to abide by the rules and regs applicable to the client's permanent staff (no limitation to confidentiality, H&S etc).

These ones never have a subs clause either, although MOO is normally covered.

I advise you it checked out by someone. The changes are usually quite simple.

[zathras]

Apparently the agent's business terms are governed by The Recruitment & Employment Confederation and cannot be changed. There is no substitution clause and apparently extra clauses cannot be added due to REC guidelines.

Then he will have no problem using the PCG/Rec contract then

[zathras]

Just negotiating my contract for next gig and the agent mentioned that the contract would be ‘inside IR35 with opt out’.

I asked why it had to be inside and he told me that legally any situation where a contractor is supervised and not just coming in as a specialist with complete autonomy is automatically inside.

I’m aware of the ‘control’ aspect of IR35 but I thought that things like substitution and MOO were bigger factors. I sent him a draft PCG contract, asked for a ‘friendly’ contract and said that I’d take a friendly contract coupled with my PCG cover and sleep soundly at night.

It will be a support and XP/AD rollout role – I know we’ve dealt with support roles and IR35 before but this has got me a bit rattled. I’m reinvesting large amounts of gross income on things like business growth training and product development so I can’t have 95% of the income from this gig subject to PAYE/NIC+employer’s NIC..

I’m inclined to believe the PCG stance that control is only a smaller factor and does not automatically deem a contract as inside (or out) – is this right?

He is talking cr*p. Put it this way when you get a plumber in do you just let him in without telling him what to do.

And what is this 'with opt-out' gubbibs. Tell him No, if it is Ir35 caught it will be IR35 caught and opted in. Of course you will be happy to opt out - as soon as he gives you a contract outside of IR35!

(Note: No agency can make you opt out - that is in your gift, not his)

[VectraMan]

Immediately, I don't llike the word "Direction" in 7.1.6, that blows your IR35 defence out of the water. ?

I had one just like that, and I objected to the word "direction" and got them to change it. I can't remember what to exactly, but something vague about meeting requirements.

it is required to report and comply with all reasonable and lawful instructions within the scope of the Assignment made by the Client

All sounds pretty bad to me.

[Bluebird]

The substituion clause doesn't allow you to sub-contract, it seems to explicitly state that it's your co's employees - which is probably just you.

As Mal said I'd get B&C to llot at it although it looks a bit ropey to me.

Who's the agent ?

[Jog On]

I'm pretty happy with the control and MOO as they are in the contract - this is the MOO (I think):

"3.1. The Contractor acknowledges that the nature of temporary work means that there may be periods when no suitable work is available and agrees: that suitability of the work to be offered shall be determined solely by the Employment Business; that the Employment Business shall incur no liability to the Contractor should it fail to offer opportunities to work in the above category or in any other category; and that the Contractor shall not be obliged to accept an Assignment offered by the Employment Business."

As far as substitution goes my main concern is that there isn't a clause in the contract so my question is:

Do the parts I've quoted imply substitution and can I get round it with a substitution letter if - as the agent states - he cannot add a clause to the contract or change his business terms?

I don't think that being supervised automatically puts a contract inside as the legal expert seems to think, so my main concern now is the substitution.

[malvolio]

Immediately, I don't llike the word "Direction" in 7.1.6, that blows your IR35 defence out of the water. And they're talking rubbish about REC limiting their ability to change contracts. Typical big agency FUD, I'm afraid.

Might I suggest this looks like a job for Bauer and Cotterell?

[MrRobin]

As I understand it, what you are looking to have in a contract is a clause that specifically says there is a lack of MOO - i.e. "The client is not obligated to provide work to the service provider, nor is the service provider obligated to accept any work offered". Your clause 7.1.6 to me just looks like it is saying if the client tells you they want a blue background in the ap you're developing, you give them a blue background, and that you will comply with their data policies etc etc...

As for substiution, again it's not a substitution clause as I know it... it will typically say something like "The service provider is permitted to provide alternative personel, provided that they are capable and it has been agreed with the client etc etc etc"

Hope that's what you were getting at...?