Contract makes me 100% liable for IR35

[ladymuck]

Those clauses are creeping in more often now. They used to be a little woolier and just say that you will be responsible for ensuring the correct taxes are paid (or words to that effect). They're now a lot scarier wrt IR35, probably because of recent developments in this area.

Get it reviewed just for (a) peace of mind, and (b) evidence of due diligence in case of an investigation. If you're still worried, then the review is often accepted for IR35 insurance as noted above - many places like Qdos do a bundle of review + insurance.

IPSE+ gives you cover in case of an investigation along with discounted contract reviews and tax and legal helplines if you have any general concerns. I don't know enough about the Qdos offering but know people who have been with them for years and are generally happy (however, they've never had cause to claim, so can't say what they're like in a crisis).

[chopper]

If you are worried, you can get insurance to protect you against any potential IR35 liabilities. e.g. the TLC35 policy from QDos.

The fee paid to you from the client includes all your tax liabilities. If you pay tax based on being outside IR35 and are later deemed to have been inside, that is your liability, not your client's liability.

[Lance]

Thanks for your reply - I'd always expect to be liable for PAYE in the event I'm in breach of IR35, but wouldn't the client usually be liable for employers NI, pensions, etc?

no. unfortunately.
If you take the money, and are subsequently found to be inside IR35 it's completely your liability.

If you're inside IR35 from the start there's a strong argument that the employer should be liable, but in the private sector they're almost always NOT, and in the public sector who knows (it's not entirely clear yet).

[nonamesupplied]

Your company is always liable for IR35, unless you are working in the public sector - in which case the fee payer is liable for ensuring that the correct taxes are deducted.

Thanks for your reply - I'd always expect to be liable for PAYE in the event I'm in breach of IR35, but wouldn't the client usually be liable for employers NI, pensions, etc?

[northernladuk]

Get it checked out by the likes of QDOS or Bauer and Cottrel and take out either TLC35 with QDOS or IPSE+ membership (or both).

Quite often contracts are either 3 or 6 months long and aren't related to the length of the project. It's just their policy on contract duration so wouldn't read too much in to that.

[TheFaQQer]

Your company is always liable for IR35, unless you are working in the public sector - in which case the fee payer is liable for ensuring that the correct taxes are deducted.

[nonamesupplied]

Hi all,

I've recently been offered a contract at a bank, and I've been going over the contract which is with a third-party agency. The contract is I think pretty good from an IR35 perspective (it states explicity that I can substitute, work without control, no mutuality of obligation), but it does also require me to indemnify the agency and the client from any and all costs relating to most things, including IR35. My interpretation is that if HMRC investigates and finds me to be in breach of IR35 (based on behaviour rather than contract), I would then be liable for my legal costs, my PAYE tax, the clients legal costs, and the clients employers NI / pension, etc.

Has anyone else come across this, and if I'm taking 100% of the risk around IR35, can anyone recommend anything I should insist upon in my relationship with the client to ensure I cannot be in breach. I think the likelihood of me actually being able to substitute myself out is low, particulary given the banks screening process. The contract role is 6 months but the hiring manager assured me it would run for at least a year (so already mutuality of obligation is in question in my mind).

Cheers all