Client Guide to IR35

[Wanderer]

If you design your working practices and your contracts, to avoid IR35, then it is not going to hold too strong in case of an inspection.

Imagine you convince the client to structure your engagement in such a way that it falls outside IR35 (say, fixed price deliverable, work subcontracted out by your LTD, provision of your own equipment etc). If HMRC challenge this saying you only did it to avoid being a disguised employee and avoid IR35, you could simply counter that you are a small businessman trying to build up a consultancy business. As a business, you have to structure your engagements in this way to give your business the flexibility to grow and you wouldn't have this if you took on the engagement as an de-facto employee.

Provided that is indeed the way you are working then there is nothing HMRC can do about you deliberately structuring your business this way. Small businesses help drive the economy forward (eg, by paying corporation tax) and this something the government is trying to encourage.

[rd409]

I may be completely wrong here, but if you are out of scope of IR35, you are outside. If you design your working practices and your contracts, to avoid IR35, then it is not going to hold too strong in case of an inspection. I would never say to a client that my working practices are based on the IR35 principles, but I would just mention at the start of the contract, that this is how I would like to work, and would be flexible to accommodate any genuine requests to deviate from those practices for a while.
Try to make sure that you are working for your own company and it has a set code of practice. If that is the same as the client, then no problem, but if they are different, your rules are adhered to. If the client is happy with that, I would not be too much worried about IR35. Take out an insurance for the legal expenses, and forget about it.

My 2p.
Dave.

[Taita]

LOL! But very nice try!

Do you seriously think client HR's are going to be bothered how IR35 impacts contractors!?

They go out to agencies for contractors because they dont want to take on employees but then treat contractors the very same as those employees they dont want to take on!

Never, ever helps to highlight to a client that you are structured so that you can mitigate your tax. As others here have said, the employers are not interested in helping you pay less tax than they do and if you are working alongside employees doing roughly the same work the employer is even less likely to be sympathetic, whatever they say to your face.

[Ignis Fatuus]

LOL! But very nice try!

Do you seriously think client HR's are going to be bothered how IR35 impacts contractors!?

They go out to agencies for contractors because they dont want to take on employees but then treat contractors the very same as those employees they dont want to take on!

Of course. What they want is employees with employees' duties but without employees' rights.

They're only trying to have it both ways, a natural human desire - like agencies who want you to assume personal liability, wanting the advantages of dealing with a Ltd Co without the disadvantages.

As in most cases of dealing with someone who wants to impose on you their power to eat their cake and have it, the only real fix is your power to say no.

[Wanderer]

You have to hit them with something they CAN understand. Spin it to sound like you are doing them a favour by trying your best to structure your working practices in order to be seen as "in business of your own account". This will keep the engagement outside the terms of the Agency Workers Regulations with all it's unwanted red tape and that's a positive thing for the client.

It's a mutually beneficial agreement. The client avoids the AWR and it steers you away from working practices which are bad for IR35. Just don't mention the IR35 angle, it's nothing to do with them and they won't give a tulip.

[BolshieBastard]

Does anyone know or have a succinct guide to IR35 from the clients side?

Rather than inventing the wheel, I was hoping something exists to hand to clients to improve their knowledge of IR35, and explain why, as contractors, we have to do things differently.

And yes, I have tried the search function.

And yes, I have trawled the web - lots of guides for contractors, but none for clients.

LOL! But very nice try!

Do you seriously think client HR's are going to be bothered how IR35 impacts contractors!?

They go out to agencies for contractors because they dont want to take on employees but then treat contractors the very same as those employees they dont want to take on!

[malvolio]

Agreed - but I'm trotting out the same comments again and again, and just getting fed up with repeating myself so was looking for a cop out!

We are addressing the problem and educating the client, but its the response to 'Why?' I was after. The current client has contractors on both umbrella and Ltd Co, so the contractors have different attitudes (ignoring the ones that have been here 5, 10, 15+ years!!).

I was hoping to get something off the web to provide to the client, but will have to talk it through with them directly - they have been very understanding, once the issue has been highlighted.

It's likely not what you're expecting, but you can always start here - Working with freelancers - clients | PCG

[SueEllen]

Agreed - but I'm trotting out the same comments again and again, and just getting fed up with repeating myself so was looking for a cop out!

We are addressing the problem and educating the client, but its the response to 'Why?' I was after. The current client has contractors on both umbrella and Ltd Co, so the contractors have different attitudes (ignoring the ones that have been here 5, 10, 15+ years!!).

I was hoping to get something off the web to provide to the client, but will have to talk it through with them directly - they have been very understanding, once the issue has been highlighted.

Money - how are you going to show the client that their failure to comply with IR35 will costs them money and in some cases a great deal?

Off my head I know there are cases of a contractor trying to claim employment rights, and he is likely not to have been the only one as most court cases don't go to court. This costs the client money in legal fees.

Not having properly defined rules that are written down of how to separate contractors from permanent staff, and making sure the agencies write proper contracts to ensure they look and act like service providers will cost them money in terms of the time their staff spend when HRMC come knocking. If you do a search you can find cases where HMRC was just referred to written documents.

[Coalman]

Agreed - but I'm trotting out the same comments again and again, and just getting fed up with repeating myself so was looking for a cop out!

We are addressing the problem and educating the client, but its the response to 'Why?' I was after. The current client has contractors on both umbrella and Ltd Co, so the contractors have different attitudes (ignoring the ones that have been here 5, 10, 15+ years!!).

I was hoping to get something off the web to provide to the client, but will have to talk it through with them directly - they have been very understanding, once the issue has been highlighted.

[LisaContractorUmbrella]

I have to say that I think NLUK is right and I am not sure that end clients having a more detailed knowledge of IR35 would help your cause - I would think that they wouldn't really care; clients take on contractors to save themselves hassle not to get involved in stuff like IR35

[jamesbrown]

Does anyone know or have a succinct guide to IR35 from the clients side?

Rather than inventing the wheel, I was hoping something exists to hand to clients to improve their knowledge of IR35, and explain why, as contractors, we have to do things differently.

And yes, I have tried the search function.

And yes, I have trawled the web - lots of guides for contractors, but none for clients.

I do recall reading some bullet-point guides for clients (or, rather, how to convince clients) at the back of some accountants own guides on IR35. Nixon Williams perhaps?

[northernladuk]

I see where you are coming from but I don't quite think this is the way. IR35 is your problem not the clients. They want someone in to do the work on their terms, how you run your finances is not really their problem.

What you want to be doing is educating them on how you wanted to be treated as a business. If they treat you as a proper business IR35 will not be an issue.

To list what puts you outside IR35 and insist they adhere to them will unwind very quickly in an investigation and leave you probably worse off than you started.

And yes, I have trawled the web - lots of guides for contractors, but none for clients.

Doesn't this kind of say something?

[Coalman]

Does anyone know or have a succinct guide to IR35 from the clients side?

Rather than inventing the wheel, I was hoping something exists to hand to clients to improve their knowledge of IR35, and explain why, as contractors, we have to do things differently.

And yes, I have tried the search function.

And yes, I have trawled the web - lots of guides for contractors, but none for clients.