Got a contract that's clearly 'inside' - what would you do?

[dynamicsaxcontractor]

An excellent point from Mal that always seems to get forgotten here. People get over eager to have their contract re-worded but if it doesn't accurately reflect what happens at site it won't be worth the paper it is written on come a review.

I think this only works the other way around, if you have an IR35 friendly contract they will look at your working practices and try to make it you are inside. If you have a contract clearly caught by the IR35 I don't think they will bother looking at your working practices to see if you are outside - which means you have to prove you are outside instead of them proving you are inside.....

[Jog On]

My guess as to why the 'default' contract id the inside one is that they probably don't want substitution clauses and D&C clauses if they can avoid them. The ease at which they swapped out for the outside one makes me wonder about the contract between the end client and the agency.. another stumbling block there.

Stupid stupid stupid legislation - the sooner they simplify it and make it fairer the better

[Support Monkey]

Got a contract that's clearly 'inside' - what would you do?

Get it checked by a professional before jumping to conclusions

[Wanderer]

"Oh do you want the IR35 friendly version instead?"

Oh, go on then if you must.

some agencies maintain IR35 unfriendly versions of the contract

WTF? I'm not doubting you, but I really don't get it. Can someone explain why on earth they would do this???

Maybe they WANT the HMRC to have a look at the contract and decide that they were really an employee of the agency and thus, the agency is liable for PAYE and NICs when the contractor does a bunk? Maybe they are just stupid. I really don't know...

[explorer]

Well!

I called them to ask if they'd be open to changing it a bit and they said "Oh do you want the IR35 friendly version instead?"

Good..So, as I said in my reply above (point 1), some agencies maintain IR35 unfriendly versions of the contract, and don't hesitate in forwarding them to us as the first thing while signing a contract...Coming to think of it, I wonder if it is indeed inadvertent

As some other posters have mentioned, it's the working practices that matter more than the wordings on the contract, so you need to avoid any unreasonable direction/control from the clientco..

[northernladuk]

Good news - but ONLY if that contract aligns to your working practices on the ground.

An excellent point from Mal that always seems to get forgotten here. People get over eager to have their contract re-worded but if it doesn't accurately reflect what happens at site it won't be worth the paper it is written on come a review.

[malvolio]

Well!

I called them to ask if they'd be open to changing it a bit and they said "Oh do you want the IR35 friendly version instead?"

Good news - but ONLY if that contract aligns to your working practices on the ground.

[Jog On]

Well!

I called them to ask if they'd be open to changing it a bit and they said "Oh do you want the IR35 friendly version instead?"

[v8gaz]

just to clarify - although the Office of Tax Simplification WILL be reviewing IR35. it is still currently in place and being enforced. At present time it is sensible to continue doing what you feel mitigates your risks of IR35.

In this case, I'd get B&C or one of the other reviewers to try and negotiate on my behalf. These days I may consider accepting a borderline contract and keeping my head down - chances of being investigated have always been slim, but that depends on your personal appetite for risk.

[Wanderer]

Doesn't have any of the IR35 friendly caluses

You could get it reviewed by one of the big players in the IR35 review market and see if they can negotiate with the agent on your behalf to get the contract changed.

Alternatively, you could bury your head in the sand and presume it's outside in the hope that you don't get investigated and then close down your company after 2 years to minimise the risk of investigation.

[krytonsheep]

Even if you're inside IR35 then the Limited is a better option as you can still profit from the 5% expense allowance.

If you register for flat rate VAT you'll get to keep some extra cash as well.

what would you do?

If you're happy with the pay while operating inside IR35 then I'd stick with that. It's worth remembering that whether or not you're inside IR35 is based on working practices not just the contract.

[Clare@InTouch]

Is the contract realistic though? Even if it doesn't contain the necessary clauses, if in reality you do have full control over what you do or an outright right to send a substitue then you could still fall outside the legislation. Have a look at Confirmation of Arrangement letters - they can be excellent third party proof if you ever need it, and effectively contradict the standard agency contract. As explorer says it's also worthwhile trying to talk to the agent to get the contract amended.

Even if you're inside IR35 then the Limited is a better option as you can still profit from the 5% expense allowance.

[explorer]

Got a contract for a new 12 month gig through today. Doesn't have any of the IR35 friendly caluses and even has one saying:



It looks like it's well inside but if IR35 is being 'simplified' then what does that mean for this contract now? I had a phone call with an accountant today who suggested that IR35 while it is in place may still be enforceable up to 5 years in the future from when the contract is taken.

So I asked about going umbrella and he told me I might still be better off sticking with my LTD..

If you got a new gig and the contract was clearly inside what currently exists as IR35 (but is due to be simplified by the next budget) what would you do? Are HMRC still investigating people for IR35 now and will they be up to next budget and 5 years 'backdated' from then?

Anyone know a good brolly that isn't using some dodgy offshore/loan scheme that's liable to get spanked a year or 2 down the line either?

I've done loads of reading and coming up short on the future of IR35 with regards to contracts taken while it's still in existence..

1. Verify with the agency that they have indeed supplied you with the right contract (for contractors). I was upset when I first saw my last contract, and blasted a senior guy from the agency left & right, the moment I got him on phone, for providing such rubbish contract (That one was even more stupid). The poor chap seemed not to understand a word, and it later turned out that they have inadvertently forwarded me the wrong contract (It seems thay maintained a non IR35 compliant version of the contract, God knows why).

2. Fight with the agency like hell, to negotiate the contract terms. I did so recently, while taking up my current contract, for another offer. They initially kept uttering the same rubbish: "we have 5000 contractors onsite...". When I refused to budge, they subsided.

3. If either 1 and 2 above don't go in your favor, the you need to either ask the agency for increasing the rate to cover the umbrella cost (most likely not going to work), or think about taking up the role on a discounted rate, considering(bearing) the umbrella costs yourself. You can go-ahead with it, if the discounted rate still looks doable to you.

In no case let decision be based on the future of IR35 as a legislation - It would be too early to speculate, and rather stupid, I might add.

[Jog On]

Got a contract for a new 12 month gig through today. Doesn't have any of the IR35 friendly caluses and even has one saying:

To co-operate with the Client’s staff and accept the direction of any person in the Client’s organisation to whom he/she is required to report and comply with all reasonable and lawful instructions within the scope of the Assignment made by the Client.

It looks like it's well inside but if IR35 is being 'simplified' then what does that mean for this contract now? I had a phone call with an accountant today who suggested that IR35 while it is in place may still be enforceable up to 5 years in the future from when the contract is taken.

So I asked about going umbrella and he told me I might still be better off sticking with my LTD..

If you got a new gig and the contract was clearly inside what currently exists as IR35 (but is due to be simplified by the next budget) what would you do? Are HMRC still investigating people for IR35 now and will they be up to next budget and 5 years 'backdated' from then?

Anyone know a good brolly that isn't using some dodgy offshore/loan scheme that's liable to get spanked a year or 2 down the line either?

I've done loads of reading and coming up short on the future of IR35 with regards to contracts taken while it's still in existence..