Agency restriction clause obstacle with transitioning from outside to inside IR35 Agency restriction clause obstacle with transitioning from outside to inside IR35
Posts 1 to 2 of 2
  1. #1

    Still gathering requirements...


    Join Date
    Jan 2020
    Posts
    36

    Default Agency restriction clause obstacle with transitioning from outside to inside IR35

    I've been assessed as inside IR35 by the client which I've challenged. They have 45 days to respond, which could well be after when the contract ends at the end of March and I'm not holding my breath for a change in decision.


    There is the possibility of a new contract, but I don't want to risk being flipped outside to inside with the same client via the same agency and being an easy target on the intermediaries report from the agency.


    There are no other viable opportunities at present and if I don't take up a new contract with the client then I could end up missing out on a fair bit of future work at a decent rate (although obviously not as good as being outside).


    I had discussed the option of taking some time out with the client if any new contract materialises in order to avoid the 3 month restriction clause in the contract with the agency and go via a different agency. Therefore in my mind reducing the risk of being flagged on the intermediaries report as looking like working with the same client and going outside to inside.


    I suspect the client might not be able to wait that long, therefore I need to think about other potential ways round this.


    If I wind up the company is it still likely the agency would pursue me as an individual if I worked with the client via a different agency inside IR35 within 3 months?


    Do you think the agency might be willing to waive the restriction clause given I've worked with them for over 3 years and they've made a decent revenue from me over the years!? Their fees were apparently 20% of my day rate for the first 2 years!


    If they won't play ball what would be a reasonable settlement for them to waive the restriction clause?

  2. #2

    My post count is Majestic

    northernladuk's Avatar
    Join Date
    Mar 2009
    Posts
    44,650

    Default

    Quote Originally Posted by Scoooby View Post
    I've been assessed as inside IR35 by the client which I've challenged. They have 45 days to respond, which could well be after when the contract ends at the end of March and I'm not holding my breath for a change in decision.
    They don't. The legislation hasn't started yet.
    There is the possibility of a new contract, but I don't want to risk being flipped outside to inside with the same client via the same agency and being an easy target on the intermediaries report from the agency.
    Yup
    There are no other viable opportunities at present and if I don't take up a new contract with the client then I could end up missing out on a fair bit of future work at a decent rate (although obviously not as good as being outside).


    I had discussed the option of taking some time out with the client if any new contract materialises in order to avoid the 3 month restriction clause in the contract with the agency and go via a different agency. Therefore in my mind reducing the risk of being flagged on the intermediaries report as looking like working with the same client and going outside to inside.
    You are going to lose more money doing this and there is no guarantee the work will still be there. Risky and I don't think it makes much difference. You are still stuffed, you just don't appear as obviously on HMRC's radar.. or do you...
    I suspect the client might not be able to wait that long, therefore I need to think about other potential ways round this.
    Ahh yes. As I thought but didn't read this.
    If I wind up the company is it still likely the agency would pursue me as an individual if I worked with the client via a different agency inside IR35 within 3 months?
    Possibly. They can but may not come after you due to the cost but they will most certainly point out the sham situation to the client and warn them not to take you on as you are still technically handcuffed.

    Do you think the agency might be willing to waive the restriction clause given I've worked with them for over 3 years and they've made a decent revenue from me over the years!? Their fees were apparently 20% of my day rate for the first 2 years!
    hahahah.. you what? Agency voluntarily giving up income? You're having a larf agent you? Again though, changing agencies just (we think) hides you a bit from HMRC. If they do find you, you are still as badly stuffed. Not a very good risk mitigation strategy.

    If they won't play ball what would be a reasonable settlement for them to waive the restriction clause?
    If there is a lot more work coming as you indicate then I'd expect something along the lines of your first born.

    But as I said, changing agency doesn't really solve anything.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •