Reply to: Contract failed review

[jamesbrown]

Er, they'll ask 'do you ever have your contracts reviewed?' during an IR35 investigation You say no and you have and it came back a fail, you're banged to rights. Say yes and it failed, you're still banged to rights.

Agreed and, if necessary, they could check the business bank account for payments related to potential contract reviews. It's one thing sharing a review directly (shouldn't be done), but it's an entirely different thing to ignore a failed review or to lie about it having taken place or about the outcome. The absence of a successful review should be expected to result in penalties, were the WP subsequently found to be inside, either as a result of fraud (having a review and ignoring or even lying about the outcome) or negligence (not having a review). I expect the penalties would be scaled accordingly, but I don't know the details of how these are determined. Bottom line, you'd be a complete muppet to not have a review, and an even bigger muppet to ignore an unfavourable outcome.

[BolshieBastard]

On the QDOS reviews it specifically says that they're not intended to be shared with HMRC

Generally I would agree, but how would HMRC ever know that you had it reviewed and ignored the advice?

How would HMRC be able to categorically prove that at that stage, you knew the working practices would absolutely match the contract which had been reviewed?

I don't think I would do it myself, but for some people, the risk is worth the reward.

Er, they'll ask 'do you ever have your contracts reviewed?' during an IR35 investigation You say no and you have and it came back a fail, you're banged to rights. Say yes and it failed, you're still banged to rights.

[TheFaQQer]

I reckon you could be on dodgy ground on this if you were unlucky enough to get investigated. If you've been told your contract is inside and you knowingly declare yourself outside, then it's difficult to argue against penalties if HMRC are being particularly arsey.

Generally I would agree, but how would HMRC ever know that you had it reviewed and ignored the advice?

How would HMRC be able to categorically prove that at that stage, you knew the working practices would absolutely match the contract which had been reviewed?

I don't think I would do it myself, but for some people, the risk is worth the reward.

[vwdan]

I reckon you could be on dodgy ground on this if you were unlucky enough to get investigated. If you've been told your contract is inside and you knowingly declare yourself outside, then it's difficult to argue against penalties if HMRC are being particularly arsey.

On the QDOS reviews it specifically says that they're not intended to be shared with HMRC

[mudskipper]

You could declare this one inside IR35 and pay the tax and NI due - possibly even include a rate hike to cover this?

Or you could NOT declare yourself inside IR35, put the money to one side and hope that you aren't investigated - if you are, you have the money to pay for it; if not, you pocket the cash.

If the working practices are different from the contract, then there's always a chance that you could still fight an IR35 investigation and win, but it's harder if the paper contract supports HMRC's view and not yours.

If you don't need the work, then I'd be inclined to walk away if it was me, though.

(And a belated happy birthday since you're back)

I reckon you could be on dodgy ground on this if you were unlucky enough to get investigated. If you've been told your contract is inside and you knowingly declare yourself outside, then it's difficult to argue against penalties if HMRC are being particularly arsey.

[BolshieBastard]

What I don't get is, what are these legal companies saying to get clients/agencies to change contracts? "Do it or I'll get my dad on you"?

From my past experience with Bauer & Cottrell, they tend to suggest different wording to a clause and use examples to show either the original clause is not reasonable or not enforcible or does not accurately reflects the working practices.

There's also the fact that the agencies know these guys are not some bunch of numb nuts just arguing for arguments sake.

Of course there are always some clauses they cannot get changed because the agency just wont budge.

[FiveTimes]

I had a review fail on several counts a couple of months back, went back/forth to the agent to get it resolved. They wouldn't budge.
qdos and the agent had quite lengthy discussion about it but it couldn't be resolved.

I walked away and took an short extension at current clientco

[Jubber]

I would never turn away work over IR35. As others have said, put the money to one side and keep invoicing.

[darrylmg]

What I don't get is, what are these legal companies saying to get clients/agencies to change contracts? "Do it or I'll get my dad on you"?

Good question.
It's not possible these guys are such smooth talkers.
Must be some legal point that could be used against an agency if a contractor is found to be within ir35.

[jamesbrown]

What I don't get is, what are these legal companies saying to get clients/agencies to change contracts? "Do it or I'll get my dad on you"?

Sometimes it isn't the message, but the messenger.

[PerfectStorm]

What I don't get is, what are these legal companies saying to get clients/agencies to change contracts? "Do it or I'll get my dad on you"?

[BolshieBastard]

Hello one and all. I have a serious question, hence I'm back on CUK and making a post here. So, to business...

This week I have had a contract fail a review on multiple counts. Some items are incidental and the corresponding clauses will be amended by the agency. Other, more chunky changes, are being resisted by the agency.

I have all of my contracts reviewed and have been doing such for many years. I have never had a situation where more than a reasonably minor change or two was enough to get the contract 'right' and let's be honest, getting the wording sorted in a contract these days is (usually) the easiest thing. So this situation is a first-time one for me (8 years of contracting).

With all of this being the case, my stance is not to sign. I'm less concerned about the specific clauses as I respect the opinion of the firm I use and if they are flagging clauses that fail the most basic of tests, then they should be changed.

I'm of the view that I have had a contract fail a review and the agency will not address all of the points, leaving me no choice but to give it a miss.

Has anyone had experience of this?

If you are confident something else will come along (and any contract clauses can be amended) then by all means walk and make it clear to the agency why. Im not sure speaking with the client about it is worthwhile, they'll just see you as an arsey contractor at best and a tax dodger at worst.

But dont fall into the trap of thinking by getting a few clauses re worded that you are home free re IR35. As we all know, its also the actual working practices that are more important.

Also, even an IR35 bird in the hand is worth two in the bush.

[TykeMerc]

With all of this being the case, my stance is not to sign. I'm less concerned about the specific clauses as I respect the opinion of the firm I use and if they are flagging clauses that fail the most basic of tests, then they should be changed.

I'm of the view that I have had a contract fail a review and the agency will not address all of the points, leaving me no choice but to give it a miss.

Has anyone had experience of this?

I have had this myself and it's down to brinkmanship. If you decide one or more clauses are show stoppers then you have to negotiate from that position and be totally prepared to walk away. Lot easier to say than to do of course if you want the contract.
There's no real option if you respect the reviewers work.

Welcome back btw, nice to see you're still around

[TheFaQQer]

You could declare this one inside IR35 and pay the tax and NI due - possibly even include a rate hike to cover this?

Or you could NOT declare yourself inside IR35, put the money to one side and hope that you aren't investigated - if you are, you have the money to pay for it; if not, you pocket the cash.

If the working practices are different from the contract, then there's always a chance that you could still fight an IR35 investigation and win, but it's harder if the paper contract supports HMRC's view and not yours.

If you don't need the work, then I'd be inclined to walk away if it was me, though.

(And a belated happy birthday since you're back)

[Alias]

Welcome Back!

I had one fail earlier this year after a review, agency wouldn't budge so I paid for B&C to re-review it and talk direct with the agency...

Agency folded straight off as soon as B&C got involved and made the changes...

Sometimes, its who negotiates and why that makes the difference...

Of course, I made sure my working practises are all in order

If its still a case of no dice, then walk away, better for you in the grand scheme of things tbh

YMMV