Reply to: IR35 / REcruitment Agencies & Ltd

[rootsnall]

There is no cast iron way of declaring yourself outside IR35. If you want to play it safe then tell your accountant you are caught and pay your full National Insurance. Most contractors I know are saying they are outside IR35, and then checking contracts have the basic anti IR35 wordings in there and taking a risk that they will never get caught. If you read the PCG site then the claim is ( or was ? ) that of the 300odd investigations covered by their recommended tax advisers only 3 I think have been done. I have kept a rough tally of what I think I have not paid in NI and tuck it away for a rainy day. If you stick to short contracts and move around a lot I think you are pretty safe. If you do 2 years+ on one site then you are increasing your risk but the odds are still that you will never hear a thing. The investigation rulings I have read didn't care too much about the contract wording it was down to the actual working practices.

[Cowboy Bob]

Can't argue about B&C's abilities, but S99 is mainly a news site. Most (not all!) of their advice and guidance comes from stuff done by the PCG. Take a look at their site (www.pcg.org.uk) and join up - for £200-ish you get your money back in TII insurances and good advice immediately.

Whilst joining the PCG is a good idea for a newbie, this page has nothing whatsoever to do with the PCG - http://www.shout99.com/contractors/i...ection=1&n=430 - which puts you directly in touch with domain experts for no cost.

[MmarcoM]

Hello,
thanks to all for useful information..
Now, question for all existing contractors....
Suppose that an agency gives you a contract .. You send it to your accountant/contract revieweer and he tells you that with that contract you are inside IR35..
What is the general approach that you contractors take?
Ok i guess it will depend if agency says it's negotiable or not.. but assuming it is negotiable, do you:
- have your contract rewritten by your accountant so that it brings you outside IR35, then submit it to agency and see what they do (do they generally accept it? or are they very strict?) ?
- return contract unchanged, and pay taxes so that Respect Party can restore the country with GAlloway ?


I suppose if agency is strict and contract is not negotiable.. it is either pay IR35 or reject it...

what is the general approach most contractors here take?

thanks to any replies.. i apologize for those questions but before i get into contracting i want tohave a picture of the situation, before getting in trouble for not knowing enough..

regards
Marco

[malvolio]

A good website to check out is www.shout99.com

There are two "ask an expert" consultants who also run a contract vetting business called Sarah Bauer and Kate Cottrell (company is called Bauer & Cottrell). Both are ex-IR inspectors and really know their stuff. For a nominal fee they will evaluate contracts that you are offered, to advise on IR35 friendliness before you commit. However, the web site is full of useful information on contract issues as well as up to date court verdicts on cases, etc.

Can't argue about B&C's abilities, but S99 is mainly a news site. Most (not all!) of their advice and guidance comes from stuff done by the PCG. Take a look at their site (www.pcg.org.uk) and join up - for £200-ish you get your money back in TII insurances and good advice immediately.

[Solid]

IR35 / REcruitment Agencies & Ltd

Hi MmarcoM

The trick here is to make sure the terms of the contract show that you are a self employed individual, who owns and operates a business that provides services.

Some tips are;

It shouldn't name you as a specific consultant, but rather aim the contract at your company.

You should have the right to substitute the consultant (but this will normally be completed at your cost i.e. training the replacement, paying for their time).

You should be able to complete the work under your own guidance. You'll decide how to do the work and how to meet the deadline. But similarly you should expect to pick up the penalty if you miss deadlines, or produce sub-standard work.

In essence you should try to avoid any wording that says someone else will dictate how you do your job, as this could be considered by the IR to then be a relationship of employer and employee. Instead you need it to show that it is a B2B arrangement.

A good website to check out is www.shout99.com

There are two "ask an expert" consultants who also run a contract vetting business called Sarah Bauer and Kate Cottrell (company is called Bauer & Cottrell). Both are ex-IR inspectors and really know their stuff. For a nominal fee they will evaluate contracts that you are offered, to advise on IR35 friendliness before you commit. However, the web site is full of useful information on contract issues as well as up to date court verdicts on cases, etc.

Hope this helps

[malvolio]

Inside...

To be precise, it means nothing at all legally, it's just the agency selling the client some more snake oil - "Screw the contractor, his tax status, his income and reality, use our contract and you won't be bothered by that nasty taxman".

However, if you are inside IR35 as a result, why not ask for holiday pay, SSP, pension rights, employment protection... They are, after all, saying you are an employee of your client, so why don't you get all the other employee benefits to go with the taxation status?

[MmarcoM]

Hello Tim,
thanks for info... just one little thing: 'IR35 compliant' means..... inside or outside?

regards
Marco

[tim123]

hello,

Let's say, i submit my CV to Hays, they find me a contract job...... with whom shall i sign that contract? with the agency or with the employer that is recruiting using that agency? marco

marco, basically the system is:

The agency will give you a contract which they 'proimise you' is IR35 compliant. It will probably not be. They will tell you it is not negotiable.

You have two choices. Sign it or call their bluff and risk having to walk away.

tim

[Mordac]

Usually you'll be sent an electronic copy of the contract (ask for one if not) and you forward it to B&C. They check it over, making sure the MOO, substitution and control clauses are all present and correct, if not they ask the agency to amend them. You'll then get a new contract and a report from B&C outlining why they think it's outside IR35. If you know the agency, it's generally OK to start working on site with the electronic version, if you don't know them it's normally best to wait for the paper copy, which you sign & return, then the agency Director signs it and return your signed copy for reference. Make sure the signed copy is the same as the electronic one, as the signed one is that which will be requested by Hector when the time comes to try and sting you for IR35. Clear?

[MmarcoM]

hello,
thanks to all for useful replies.... i hate to bother with simple questions, but having been a permie for last 7 yrs i don't know exactly how contracting with agencies work and i appreciate if someone can clarify a little..
How does it work?
Let's say, i submit my CV to Hays, they find me a contract job...... with whom shall i sign that contract? with the agency or with the employer that is recruiting using that agency?
secondly... normally opening positions for contract are with 'immediate start or with close start (let's say, a week) ... when the contract is given to me, as it was suggested with prev posts in this thread, i should pass it to my accountant to check it and 'rewrite it' eventually.... then i give it back to agency.... if the job has an immediate start... well i suppose they either reject it or accept it, not sure if there is time to go back and forth with accountants to write/rewrite etc..
Sorry for being so 'demanding', but i plan to start contracting and i'd like to know what are the normal steps for contractors.... can anyone tell me how it works in practice?

thanks and sorry for bothering
regards
marco

[malvolio]

And then once your contract is vetted by Bauer & Cottrell or Accountax etc you can apply for insurance to protect against the costs of investigation. Try PCG for example.

Ermm - the PCG insurance, unlike everyone else AFAIK, is not conditional, you only have to be a member to be covered.

[ChimpMaster]

And then once your contract is vetted by Bauer & Cottrell or Accountax etc you can apply for insurance to protect against the costs of investigation. Try PCG for example.

[cojak]

You will need to get any contract given to you checked by specialists in this kind of thing.

Bauer & Cottrell or Accountax are 2 companies that do this kind of thing. They will review the contract and negotiate changes with the agency.

[MmarcoM]

Fred, you guessed right .. but 'i work in IT' means actually i work
in INformation Technology industry..

[MmarcoM]

but that alone won't help me in drawing a contract which is outside IR35...



ciao