Outside IR35 PS contract

[LondonManc]

Sounds to me that Agencies need to up their game and make sure that new contracts have had due diligence applied.

Saying these are just generic terms is not good enough TBH

The agencies have been duly diligent. They're trying their hardest to pass the liability down the line. Whatever way Andy tries to dress it up, that clause can be seen as a way for agencies to declare outside then pass the buck.

It's pretty much been my concern all along - how responsible for the fine/back tax will the agency be? While it's a generic clause, I'd want an extra clause inserting, confirm that "the above clause in no way exonerates the agency from its financial obligations should the contract later be deemed inside IR35 while initially being declared outside IR35."

[Semtex]

Sounds to me that Agencies need to up their game and make sure that new contracts have had due diligence applied.

Saying these are just generic terms is not good enough TBH

[jamesbrown]

Fair enough. My point was that these are likely generic.

Yep, understood, just noting that it's best to get them removed. Happens a lot with non-compete clauses too - best to get them removed from the start, because they're generally unenforceable unless there's some specific/concrete knowledge that needs to be protected.

[Andy Hallett]

Correct, but I wouldn't touch a contract with such broad transfer of liability clauses, enforceable or otherwise. Guff clauses are often used as leverage via threats to test them, and that could be an expensive game. Never sign a contract with crap that shouldn't be there.

Fair enough. My point was that these are likely generic.

[jamesbrown]

To be fair most companies would have that as a generic term. If an agency contracts with a PSC on a normal engagement it would rightfully protect itself with its supplier.

I suspect these generic terms will remain (I haven't changed ours) but just because it's in the contract, and you agree to it, doesn't make it enforceable.

Correct, but I wouldn't touch a contract with such broad transfer of liability clauses, enforceable or otherwise. Guff clauses are often used as leverage via threats to test them, and that could be an expensive game. Never sign a contract with crap that shouldn't be there.

[Andy Hallett]

Outside IR35 PS contract

Ignorance like that makes you wonder what other nasties are in the contract.

To be fair most companies would have that as a generic term. If an agency contracts with a PSC on a normal engagement it would rightfully protect itself with its supplier.

These generic terms will remain (I haven't changed ours) but obviously if an outside determination changes to an inside one the liability moves to the 'fee payer'

[perplexed]

Unenforceable to push the liability to you. Their contract will not trump the legislation.

Ignorance like that makes you wonder what other nasties are in the contract.

[Andy Hallett]

Outside IR35 PS contract

Long-time reader of CUK, long-time contractor (approx 15 years), first time poster.

For background - up until the end of last year, all my contracts were in the private sector. I'm just finishing my first 3 month Public sector contract (a natural end, the project has been successfully delivered). I have just been offered a new contract in a different public sector organisation.

This public sector organisation is apparently not using the new tool, but instead blanket labelling every contractor as "outside ir35", which is somewhat troubling on it's own. Received the contract yesterday and sent it off for review - but the agent phoned me and wanted me to sign it pending the review. I refused, so he asked why and having viewed the contract myself, I said I found the following troubling -

"The Supplier will indemnify and keep and
the Client indemnified in full against (without
limitation) any claims, actions, demands, costs
(including legal costs), penalties and liabilities
incurred in respect of or arising in connection
with:
a. any such income tax, National Insurance and
similar contributions and any VAT (including any
penalties and interest) which may be found due
by reason of any payment made under or in
connection with this Contract;"

The point I made was that if the work is outside ir35, then it's not me who pays if they've got it wrong (and I would think a blanket judgement by the PS org on ir35 would raise a red flag to HMRC). At which point the Recruiter started BSing about how once you were outside you'd never be back inside (ignoring case law and common sense), so I said I'd like to wait for the review to complete before signing.

Am I being paranoid about this clause? Personally I think I'm not, and my instinct is to look for private sector work while the ir35 legislation sorts itself out one way or another

Unenforceable to push the liability to you. Their contract will not trump the legislation.

Edit - I read this wrong. The clause would need to stay.

[Lurker101]

Long-time reader of CUK, long-time contractor (approx 15 years), first time poster.

For background - up until the end of last year, all my contracts were in the private sector. I'm just finishing my first 3 month Public sector contract (a natural end, the project has been successfully delivered). I have just been offered a new contract in a different public sector organisation.

This public sector organisation is apparently not using the new tool, but instead blanket labelling every contractor as "outside ir35", which is somewhat troubling on it's own. Received the contract yesterday and sent it off for review - but the agent phoned me and wanted me to sign it pending the review. I refused, so he asked why and having viewed the contract myself, I said I found the following troubling -

"The Supplier will indemnify and keep <Agent> and
the Client indemnified in full against (without
limitation) any claims, actions, demands, costs
(including legal costs), penalties and liabilities
incurred in respect of or arising in connection
with:
a. any such income tax, National Insurance and
similar contributions and any VAT (including any
penalties and interest) which may be found due
by reason of any payment made under or in
connection with this Contract;"

The point I made was that if the work is outside ir35, then it's not me who pays if they've got it wrong (and I would think a blanket judgement by the PS org on ir35 would raise a red flag to HMRC). At which point the Recruiter started BSing about how once you were outside you'd never be back inside (ignoring case law and common sense), so I said I'd like to wait for the review to complete before signing.

Am I being paranoid about this clause? Personally I think I'm not, and my instinct is to look for private sector work while the ir35 legislation sorts itself out one way or another

My new contract starting 10th April has just been found outside but I won't see the contract until after the legislation has been finalised on Monday. I wouldn't want to be signing anything with a clause like that in it as I have no control of the decision. IANAL but on the flip side it could be ripped apart in court, I wouldn't want to be the test case.

[DotasScandal]

Absolutely do not sign until this has been deleted from the contract.
(And don't buy any "it can't be done", "it's standard", "we're not allowed to make changes to the contract" BS)

[saptastic]

Interesting clause. But hugely contradictory of all that has been discussed/legislated. Is this allowed?

[jamesbrown]

Am I being paranoid about this clause? Personally I think I'm not, and my instinct is to look for private sector work while the ir35 legislation sorts itself out one way or another

No. You're absolutely doing the right thing. Wait for the review. However, I would personally insist on that clause being removed, regardless of the outcome of the review.

[eek]

"The Supplier will indemnify and keep <Agent> and
the Client indemnified in full against (without
limitation) any claims, actions, demands, costs
(including legal costs), penalties and liabilities
incurred in respect of or arising in connection
with:
a. any such income tax, National Insurance and
similar contributions and any VAT (including any
penalties and interest) which may be found due
by reason of any payment made under or in
connection with this Contract;"

I agree, I definitely wouldn't be rushing to sign any contract with that clause in it...

[IsaacD]

Long-time reader of CUK, long-time contractor (approx 15 years), first time poster.

For background - up until the end of last year, all my contracts were in the private sector. I'm just finishing my first 3 month Public sector contract (a natural end, the project has been successfully delivered). I have just been offered a new contract in a different public sector organisation.

This public sector organisation is apparently not using the new tool, but instead blanket labelling every contractor as "outside ir35", which is somewhat troubling on it's own. Received the contract yesterday and sent it off for review - but the agent phoned me and wanted me to sign it pending the review. I refused, so he asked why and having viewed the contract myself, I said I found the following troubling -

"The Supplier will indemnify and keep <Agent> and
the Client indemnified in full against (without
limitation) any claims, actions, demands, costs
(including legal costs), penalties and liabilities
incurred in respect of or arising in connection
with:
a. any such income tax, National Insurance and
similar contributions and any VAT (including any
penalties and interest) which may be found due
by reason of any payment made under or in
connection with this Contract;"

The point I made was that if the work is outside ir35, then it's not me who pays if they've got it wrong (and I would think a blanket judgement by the PS org on ir35 would raise a red flag to HMRC). At which point the Recruiter started BSing about how once you were outside you'd never be back inside (ignoring case law and common sense), so I said I'd like to wait for the review to complete before signing.

Am I being paranoid about this clause? Personally I think I'm not, and my instinct is to look for private sector work while the ir35 legislation sorts itself out one way or another