Reply to: Waiver clause

[simes]

We don't know - theory says they should be, but I don't know what the law and practicality says. And the rules for NI are different to income tax which makes everything far more complex than I wish to think about.

<Exhausted>

This is the gift that just keeps on giving...

[eek]

High five figures... Dunno if large or otherwise.

Would back taxes be recoverable from the agency, or in fact the HMRC? I really don't know. Hence why I need to see the appeals process, to whom it is directed / opened, and from whom monies are recovered.

We don't know - theory says they should be, but I don't know what the law and practicality says. And the rules for NI are different to income tax which makes everything far more complex than I wish to think about.

[simes]

I hope you have a large war chest - no agency is going to risk having to pay money they have paid to but cannot recover from HMRC and that is what this clause is about...

High five figures... Dunno if large or otherwise.

Would back taxes be recoverable from the agency, or in fact the HMRC? I really don't know. Hence why I need to see the appeals process, to whom it is directed / opened, and from whom monies are recovered.

[eek]

Well, we as contractors are just going to have to bloody well make sure that the Clients and Agencies can't have it both ways. And indeed the HMRC.

The appeals process I am not sure is nailed down yet. But in the interim, signing those clauses is not advised.

I hope you have a large war chest - no agency is going to risk having to pay money they have paid to but cannot recover from HMRC and that is what this clause is about...

[simes]

I suspect you are going to be hard pushed to find an inside IR35 contract that doesn't have such a clause as with deemed payments the agency cannot get the money back from HMRC.. I know that I would be moving on to the next contractor rather than removing this clause as the risk is just too great relative to the margin I would make...

The furlough one is a good pick though - I suspect a lot of banks will be stupid enough to send inside IR35 contractors home while the office remains open (it's fine to force holiday when the office is closed, doing so when the office is open will be another thing entirely).

So I think you've identified December's entertainment...

Well, we as contractors are just going to have to bloody well make sure that the Clients and Agencies can't have it both ways. And indeed the HMRC.

The appeals process I am not sure is nailed down yet. But in the interim, signing those clauses is not advised.

[eek]

The draft ESM suggests that the future legislation permits a disagreement to be raised at any point of an engagement, particularly if there is a material change in working practices change. Waiving this right means that should the Supplier discover that the SDS was issued on an incorrect understanding of working practices, they would have no recourse against the Client or Agent to resolve it. Can you actually give away a right to a course of action which is provided by law?

Imagine you accept a gig where you are told it is Inside IR35, only to discover there is irreducible MOO, you can't use staff facilities, you have to bring in your own equipment, and you're not closely controlled. Would you not want to correct that? The method HMRC currently points to is to have that corrected through payroll adjustments, waving this right would remove that primary avenue and create a tax\accounting headache.

I think it's more the backtax side of things they are worried about. It's not a problem once everyone knows you are outside to pay unpaid invoices gross, there isn't the margin to pay the wrongly deducted amounts correctly and that is what this clause is trying to solve.

Let's be honest all we are seeing here is what a complete mess this change is making to the entire industry...

[eek]

eek's right.

What the waiver is saying is, once the SDS is made, and you've signed the contract, the agency is then saying if, for example, the working conditions as later experienced make you clearly Outside IR35, the waiver is saying you can't appeal.

This to my mind should be avoided at all costs.

The HMRC has made a big play about the words of a contract Not being enough to secure an Outside result. They have said that the working practices, which can Only be known once in the role for a few months, have to marry up to and reflect the words of the contract. If this element is removed from a contractor's appeals process through such waivers, then this really is a case of bending over and just taking it.

For example, if the SDS says there is MoO, and then you are sent home over Xmas for a furlough, this is clearly exemplifying no MoO. The only way to know this is After you've signed contracts and waivers. By then, it is too late.

Do not sign it.

I suspect you are going to be hard pushed to find an inside IR35 contract that doesn't have such a clause as with deemed payments the agency cannot get the money back from HMRC.. I know that I would be moving on to the next contractor rather than removing this clause as the risk is just too great relative to the margin I would make...

The furlough one is a good pick though - I suspect a lot of banks will be stupid enough to send inside IR35 contractors home while the office remains open (it's fine to force holiday when the office is closed, doing so when the office is open will be another thing entirely).

So I think you've identified December's entertainment...

[simes]

eek's right.

What the waiver is saying is, once the SDS is made, and you've signed the contract, the agency is then saying if, for example, the working conditions as later experienced make you clearly Outside IR35, the waiver is saying you can't appeal.

This to my mind should be avoided at all costs.

The HMRC has made a big play about the words of a contract Not being enough to secure an Outside result. They have said that the working practices, which can Only be known once in the role for a few months, have to marry up to and reflect the words of the contract. If this element is removed from a contractor's appeals process through such waivers, then this really is a case of bending over and just taking it.

For example, if the SDS says there is MoO, and then you are sent home over Xmas for a furlough, this is clearly exemplifying no MoO. The only way to know this is After you've signed contracts and waivers. By then, it is too late.

Do not sign it.

[IRMe]

It's just your right to sue them that you are waiving if the determination was found to be wrong - i.e. you agree an inside IR35 contract and 6 months later someone decides your contract is outside you can't go after the agent / end client for your lost money.

This is a blooming simple clause - once you accept the determination, you can't say it was wrong later...

I take it you are taking an inside IR35 contract? As that would have been useful information to add to your post.

The draft ESM suggests that the future legislation permits a disagreement to be raised at any point of an engagement, particularly if there is a material change in working practices change. Waiving this right means that should the Supplier discover that the SDS was issued on an incorrect understanding of working practices, they would have no recourse against the Client or Agent to resolve it. Can you actually give away a right to a course of action which is provided by law?

Imagine you accept a gig where you are told it is Inside IR35, only to discover there is irreducible MOO, you can't use staff facilities, you have to bring in your own equipment, and you're not closely controlled. Would you not want to correct that? The method HMRC currently points to is to have that corrected through payroll adjustments, waving this right would remove that primary avenue and create a tax\accounting headache.

[eek]

Nope. Wont be taking it

But the contract is for an inside IR35 contract isn't it.

1) because that is the clause I would expect to see in it (designed to stop you claiming money afterwards were the determination - you accepted - turned out to be wrong)
2) confirmation means that we can point the next person who asks about a similar clause to this thread.

[redman123]

Nope. Wont be taking it

[eek]

Thats the thing. The problem in the clause is the bit where it says “.. and agrees to waive..”
Which is interpreted into something like you agree to take on the agency and clients risk.

It's just your right to sue them that you are waiving if the determination was found to be wrong - i.e. you agree an inside IR35 contract and 6 months later someone decides your contract is outside you can't go after the agent / end client for your lost money.

This is a blooming simple clause - once you accept the determination, you can't say it was wrong later...

I take it you are taking an inside IR35 contract? As that would have been useful information to add to your post.

[redman123]

Will be the norm, why would they carry the risk and not you?


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Because the legislation says so?

[redman123]

Testing

[GhostofTarbera]

Will be the norm, why would they carry the risk and not you?


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