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Legal action / Mislead contract was outside IR35

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    Legal action / Mislead contract was outside IR35

    Hi all,

    Agency told me contract is and will be outside IR35 (the set up is Agency > Consultant > Client). Been in the contract for over a year, recently had a dispute with the consultant over my treatment (treating me like a perm), and have had my contract terminated.

    After close inspection of my working practices for the past year, this without doubt has been an inside IR35 contract, but mislead as an outside contract.

    I've got substantial proof of this being an inside IR35. I want to take legal action against either the agency consultant or both for misleading me.

    What are your thoughts?

    Thanks,
    Alex

    #2
    The agency gave you a contract that was outside, I assume you had it checked by a legal professional to confirm this.

    They cannot determine how the day to day working practices pan out. That is up to you and the client.

    Comment


      #3
      So you made the determination as outside & I assume you've now been terminated due to the dispute over it. So what's actually your issue? The fact you've been terminated? The fact the agency told you it was outside? Not sure why the agency would even mention that if it was a year ago.
      If you don't have anything nice to say, say it sarcastically

      Comment


        #4
        The liability is yours. You do have paperwork (say a professional contract review prior to beginning the contract) which shows that your decision that the contract was outside IR35 was both correct and valid?

        Otherwise I'm sorry but I can't see what you can do except you seem to demonstrate the fact that the old way of contractors determining whether a contract was inside or outside IR35 was open to abuse.
        merely at clientco for the entertainment

        Comment


          #5
          Taking your post at face value, you should now pay all taxes due or cross your fingers. You are freely admitting that your status determination, which was your responsibility, was wrong. You could’ve enforced the contractual terms, including terminating for breach of contract, but you chose not to do that. If you fail to pay the taxes due, knowing now that they are certainly due, then you’re in heavy penalty territory. Obviously, you should confirm your situation with a status expert, but this is a hard lesson to learn: make sure your contract is clear and that your WP are aligned, otherwise terminate.

          Comment


            #6
            I didn't determine this to be outside. I was told this is outside IR35 by the agency (the paperwork was also reviewed professionally and deemed to be outside).

            However in actual practice my treatment has been very much inside. So I see this as quite dishonest from the suppliers part.

            i want to flag this to HMRC and I want to take legal action against the supplier for misleading.

            Comment


              #7
              Originally posted by cyborg1337 View Post
              I didn't determine this to be outside. I was told this is outside IR35 by the agency (the paperwork was also reviewed professionally and deemed to be outside).

              However in actual practice my treatment has been very much inside. So I see this as quite dishonest from the suppliers part.

              i want to flag this to HMRC and I want to take legal action against the supplier for misleading.
              It was your responsibility to determine if the information you were given was correct - and that doesn't seem to be the case.

              What do you mean that the paperwork was reviewed professionally? Who reviewed it and who paid for the review? Were your working practices included within the review?

              Sadly I don't think you are going to get the answer you want from us on here - you seem to be blaming others for things that were under your control that you failed to control or walk away from..
              merely at clientco for the entertainment

              Comment


                #8
                Originally posted by cyborg1337 View Post
                I didn't determine this to be outside. I was told this is outside IR35 by the agency (the paperwork was also reviewed professionally and deemed to be outside).

                However in actual practice my treatment has been very much inside. So I see this as quite dishonest from the suppliers part.

                i want to flag this to HMRC and I want to take legal action against the supplier for misleading.
                That is completely irrelevant to what you owe in taxes, because the responsibility is yours. The agency can say anything knowing full well that the responsibility is yours, and now you’re screwed. Also, you saw the real working practices and did nothing (for a year!). You need to wake up, learn the lesson and move forward. Legal action is a complete waste of money and will fail (again, a whole year!).

                Comment


                  #9
                  Because in practice it's not always so clear where you fit, so sometimes setting boundaries can be hard. In hindsight, looking back with close inspection has made me realise why it's inside.

                  However what about the supplier for being fraudulent? They hire contractors, treat them in whatever they want and get away?

                  Also.... let's assume mid-way I'm like woah this is an inside contract, should I have given my termination, and get them done for not following proper practice on their part?

                  How do you handle a situation when your intentions are genuine, but the supplier does whatever the hell they like?
                  Last edited by cyborg1337; 23 February 2020, 15:03.

                  Comment


                    #10
                    Originally posted by cyborg1337 View Post
                    Because in practice it's not always so clear where you fit, so sometimes setting boundaries can be hard. In hindsight, looking back with close inspection has made me realise why it's inside.

                    However what about the supplier for being fraudulent? They hire contractors, treat them in whatever they want and get away?
                    1) As I've spent 18 years drilling into the heads of my children - Life's unfair deal with it.
                    1b) There is nothing you can do - the fact your didn't check what was said and whether it matched reality is your fault - not their's
                    2) Why do you think the rules change in April?
                    merely at clientco for the entertainment

                    Comment

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