Reply to: The proverbial just hit the fan

[MaryPoppins]

Got offered a gig Friday morning after a 2.5 week wait. Waited ALL day for the contract to finally arrive. It did just before COB Friday, pending an early start this Monday just passed.

The other contractors that have started find themselves in the same boat as me. The pimps are refusing to send out the IR35 opt out forms as we have "already started". The pimp dealing with this, its his first job and basically he tuliped up by not giving us the forms/option up front.

The pimps legal team are stonewalling over this. I have CV out to Accountax for IR35 vetting anway and they cannot get back to me with written report for 5 business days.

I have heard varying reports of the significance of opting out. Just how tuliped are we if we don't, they won't and we can't?

Also ClientCo are not amused and have offered us to contact direct. Anyone been in this situation? How much did the pimps win at the obvious court case?

Oh my tulips I am very concerned.

Just read this and am sure you have it sorted now, but - this is all actually fairly simple in many ways.

IR35 and the EAA regs have nothing to do with each other. IR35 is what you (I assume) need to ensure you are outside, for tax purposes. i.e. you are a proper contractor, like.

The EAA regulations are, I think, what your post relates to. The regulations were bought in originally to protect agency temps. Contractors are now able to 'opt out' of these regulations if they feel they don't apply. Although agencies are 'not allowed' to sway you, most agencies are dead against contractors opting in, and make it as difficult as possible. Which is why it is so important for us contractors to be as informed as possible when dealing with agencies who are telling us that if we opt IN, we will be 'inside IR35.' The only way this could happen is if (as happens) they withdraw the IR35 friendly contract once you opt in, and present a non-friendly IR35 contract. Otherwise, whether you are opted in or opted out is of no relevant to the client (whatever your lovely pimp may say, for future ref. A favourite of pimps I have spoken to is to spout 'well, Ok. If you opt in...it will make you an employee in the eyes of the client...'). Untrue. Opting in will protect you against several factors, the main ones being non-payment from the agent, and the (usually long) handcuff clause in contracts. If you are opted in for example, you have the option to go direct with the client something like 8 weeks after your contract end. If you are opted out, you generally have to adhere to the clause in your contract that will state a 12 month stay-away clause. (Don't quote me on the specifics there, but you get the gist).

In summary (!), your agency seem either confused, or completely on the ball. I can't decide which. The PCG advises that once you are 'introduced' to a client (which I took to mean interviewed by client), you are unable to opt out of the EAA regulations. You are opted in to the EAA Regs. This is no bad thing in the current climate possibly, but it is always your decision with every contract you take on. Make sure you read up on it properly so you can swat these pimps away.

You are legally allowed to opt back out, but I am a bit fuzzy on this one as to when you do it.

Bit of a long one, sorry - but it really gets my goat when agencies scare relatively new contractors with their bullcrud.

HTH.

[Jog On]

The agency for this gig tried to get me to sign a form saying "I agree to pay myself in line with IR35 and it's not up to *agency* to ensure this"

What they wanted was no laibility if I ever did get investigated but it's worded like an IR35 opt in form if ever there was such a thing.

I'll happily sign something to keep them out of any possible future disputes between MyCo and HMRC - but who are they to tell me how to run my business!

Still haven't signed it 3 months in and haven't heard a peep out of them about it

[Lewis]

I'll calm down when I know I am IR35 safe.

I think opting in or out is largely irrelevant with regards to IR35. If you are worried why not take out insurance from QDOS or join the PCG. Both options are of infinitely much more use. QDOS will (subject to you meeting their insurance criteria) pay your legal fees for an IR35 defence and any tax, interest and penalties as a result of you losing. PCG will pay your legal fees. I actually have both as I want to support the PCG but want the extra cover offered by QDOS.

[Chugnut]

Are you mixing up the word "out" with the word "in" there?

WHS.

I was under the impression that agencies always wanted you to opt out; they didn't want you to opt in. If you've already been introduced / had an interview with ClientCo (not sure about if they've only been sent a CV), it's too late to opt out.

[MPwannadecentincome]

interesting to read this post - I had been confused about opting out (not affected me as I am working direct) and in now it is clearer to me - so I will opt in if I am ever unfortunate enough to need to go through an agent!

[Beefy198]

I'm very interested to know....

Why do you want to opt out?

If you think it's some sort of IR35 pointer, you have taken the typical agency bulltulip hook, line and sinker.

[suityou01]

Please just go and do the job - times are changing - be glad of the work. No contract is IR35 safe. Do the work and have a punch up with the revenue later, if at all. Even if you have to pay the extra NI on this particular contract - you are working !!! Don't mess up the gig over this.

Thanks for all the feedback. As a relative contractor nube (18 months - 4th contract) I guess my situation is one of knee-jerk. You have to understand the pimps have been extremely naive in the way they have conducted themselves, and all four contractors have the same opinion. I did not rush to make opinions known as I do not rush into making negative comments. Hard fought and won experience has taught me that.

The very fact that the pimp is trying to retrospectively get my permission to send my CV to ClientCo even after I have started is indicative of what I have been up against.

It seems rather unfair that he can apply to get retrospective permission to satisfy his legal team's requirements, and I can't retrospectively opt out. Shurely the goose and gander can have the same meal here.

As far as the benefits of opting out go, I am still out to lunch. Although I would feel more comfortable opted out.

I see no question of risking the gig. I would not be so stupid. Honest.

[deckster]

Interesting. The same regulations that I am trying to be opted out of are also the same regulations the agency is in breach of by not getting my written consent to approach the client. According to the regs, the moment the client receives my CV if I have not opted out I then cannot. BUT if the agency failed to get permission to send my CV across, I was not given the opportunity to opt out.

The whole thing is flipped.

I'll calm down when I know I am IR35 safe.

I always opt in anyway. I like the protections it gives me re: payment, restrictive clauses etc. and the prevailing wisdom is that it really isn't an issue when it comes to IR35 - eg http://www.contractoruk.com/news/001496.html and pretty much every article I've read on the regs.

[Jubber]

I'll calm down when I know I am IR35 safe.

Please just go and do the job - times are changing - be glad of the work. No contract is IR35 safe. Do the work and have a punch up with the revenue later, if at all. Even if you have to pay the extra NI on this particular contract - you are working !!! Don't mess up the gig over this.

[kanulondon]

am confused by this whole post.....

[suityou01]

leg to stand on? You have always had at least 2 legs to stand on. It's the agency that messed up for themselves by failing to coerce you to opt out of the regs in time. Calm down dear!

Since you have already turned up to the client it is far too late to opt out. You should tell the agent this, but that you are nice chap and promise not to take advantage of him, and he should chalk it down to experience if he's lucky enough to stay in his job for a couple more weeks.

Interesting. The same regulations that I am trying to be opted out of are also the same regulations the agency is in breach of by not getting my written consent to approach the client. According to the regs, the moment the client receives my CV if I have not opted out I then cannot. BUT if the agency failed to get permission to send my CV across, I was not given the opportunity to opt out.

The whole thing is flipped.

I'll calm down when I know I am IR35 safe.

[jmo21]

Go on.

go on what?

it's you that said your CV was out for IR35 checking

[thunderlizard]

leg to stand on? You have always had at least 2 legs to stand on. It's the agency that messed up for themselves by failing to coerce you to opt out of the regs in time. Calm down dear!

Since you have already turned up to the client it is far too late to opt out. You should tell the agent this, but that you are nice chap and promise not to take advantage of him, and he should chalk it down to experience if he's lucky enough to stay in his job for a couple more weeks.

[suityou01]

I've highlighted the important parts, in case you missed it.

The agency have retrospectively emailed me an EAA form to ask for permission to send my CV and references to the client. (The pimp admitted to me over the phone he should have done this in the first instance).

If he need to get permission legally before he can send the CV across, and hasn't yet done so does this give me some leg to stand on now?

[VectraMan]

Therefore agencies don't want you to opt out, so they will tell you that if you do opt out, you are automatically caught by IR35, you will get eaten by a lion etc. etc. They are lying.

Are you mixing up the word "out" with the word "in" there?