Contract Clauses - Not sure what they mean Contract Clauses - Not sure what they mean
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  1. #1

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    Default Contract Clauses - Not sure what they mean

    Hello, I wonder if anyone can provide some guidance.

    I've just received a contract with the following two clauses:

    A: "The Company(The recruitment agency )shall be entitled to withhold from any payment due to the Supplier under this Agreement any sum that it may in its reasonable opinion be or become liable to pay in respect of
    income tax or national insurance relating to Consultants or workers supplied via the Supplier including
    any such liability under the Intermediaries Legislation and shall release such sum to the Supplier on
    provision of, and to the extent of, such evidence from Supplier as the Company shall reasonably
    require that such liability shall not arise.
    "

    B: "You agree that you shall not prior to the expiry of 6 (six) calendar months after the termination or expiry of the Agreement, whether by yourself or with any other person in any capacity whatsoever directly or indirectly
    induce (or seek to induce) to leave or cease performing service(s) for any member of the Client, any contractor
    or employee of any member of the Client with which or whom you had material contact in the course of your
    supply of the Services at any time in the six months prior to such termination or expiry.
    "

    Questions are:
    1) Regarding the section A, Will it impact my IR35 status, either positively or negatively? Shouldn't the tax liabilities and NI be left to the contractor rather than the agency?
    2) Regarding the section B, What it says doesn't make sense to me. Could you help me understand this please?


    Thanks

  2. #2

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    Clause A doesn't impact your IR35 status, but the agency aren't about to pay any taxes due that you haven't paid and withhold money from your payment to cover the costs. It's never going to happen but agencies spend more time closing off invisible risks than they do on recruitment.

    Clause B says "Don't pinch your clients' staff or suppliers". I suspect it's unenforceable because it is so wide-ranging. It's also very unlikely to happen (and if you did want to nick one of their people to your next gig, you would be rather more careful about how you did it anyway).

    Probably nothing to worry about, but think about getting your contract reviewed, preferably by someone who looks at the entirety, not just the IR35 bits. You have to wonder what else is in there
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  3. #3

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    Quote Originally Posted by malvolio View Post
    Clause A doesn't impact your IR35 status, but the agency aren't about to pay any taxes due that you haven't paid and withhold money from your payment to cover the costs. It's never going to happen but agencies spend more time closing off invisible risks than they do on recruitment.

    Clause B says "Don't pinch your clients' staff or suppliers". I suspect it's unenforceable because it is so wide-ranging. It's also very unlikely to happen (and if you did want to nick one of their people to your next gig, you would be rather more careful about how you did it anyway).

    Probably nothing to worry about, but think about getting your contract reviewed, preferably by someone who looks at the entirety, not just the IR35 bits. You have to wonder what else is in there
    @malvolio many thanks for your help

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