My agent admitted that they have no ROS in their contract. Can I sue them?

[maxima]

After I received QDOS news about 2 guys lost their IR35 cases and both sounded perfectly as meself I called MD of my agency and asked to double check if agent-cleint contract has ROS (I have ROS between my ltd and the agent).

MD said - no they dont as the client would never sign that contract.

Seems like a year of my life is screwed.

The question is. In event HRMC would like to get some money back - how do they calculate unpaid tax (I currently pay about 38% from net earnings altogether including my personal tax return and very small epxeses - around 300 a month for the tube, phone and PC parts)? How much roughly I would pay if the thing will go to court and I lose the case (I have QDOS insurance though but they may argue I am not covered as agent's contract differs)?

The another question is - guy within the agency who managed my contract told me in email (which I believe still have) that agency have mirror copy of my contract with the client. Can I sue them for deception?

Cos they mislead me to believe that I was outside IR35.

[TheFaQQer]

KEEP THE EMAIL!!!

One of the cases that HMRC won recently was on the basis that the EB misrepresented the situation regarding contracts between EB and client. IIRC, PCG were willing to back his fight if he wanted to sue the EB, since it would be an important precedent to set.

If you were investigated, and lost, then you would possibly have a case to fight against the EB.

Of course, now that you know that you are closer to being inside IR35 than before, if you continue to assert that you are outside and are subsequently found to be inside, would you be evading tax with the knowledge you now have?

[malvolio]

There ar two plan here:

Plan A - If you're not in the PCG, get signed up now. Then get done for IR35 and appeal it. I'll bet PCG would support you all the way up to the HoL since this is exactly why the whole contractor market place is such a mess. Someone neeeds slapping hard for letting contracts they have no intention or capability of honouring.

Plan B is set aside the whole contract as being in breach because it contains an intentionally sham clause and get your friendly MD to take you on directly with a proper non-IR35 set of Ts&Cs (which won't necessarily include RoS if you get everything else right) else you walk away.

[maxima]

I have QDOS insurance. Will be paying for another 4 years I think (just in case).

I am going to switch the contract next month to another solution (wont tell which but is very unpopular on this forum and will bring another wave of criticism ).

The contract supposed to finish this summer.

But legally - agent not obliged to tell me anything right? So if next time I will be able to actually see the contract - how would I know it is a real contract? And how would I prove I seen what I've seen - few years later in court??

Seems that whole IR35 thing is made so vague that to ease abusing contractors.

[maxima]

Of course, now that you know that you are closer to being inside IR35 than before, if you continue to assert that you are outside and are subsequently found to be inside, would you be evading tax with the knowledge you now have?

Well that is the question of questions. I believe that I am genuinely in business regardless HRMC dodgy claims through IR35 loophole or dodgy agents.

But I dont believe now that my case will be seen same by judge.

So I will switch.

[malvolio]

I have QDOS insurance. Will be paying for another 4 years I think (just in case).

I am going to switch the contract next month to another solution (wont tell which but is very unpopular on this forum and will bring another wave of criticism ).

The contract supposed to finish this summer.

But legally - agent not obliged to tell me anything right? So if next time I will be able to actually see the contract - how would I know it is a real contract? And how would I prove I seen what I've seen - few years later in court??

Seems that whole IR35 thing is made so vague that to ease abusing contractors.

The agent is not required to tell you anythihg about his contracts with iother parties. However, he is also not supposed to write a contract that contains a clause he knows to be unenfiorceable or unsupported; that is deception (actually a specific form of deception but I can't remember the name of it) and is therefore illegal. HEne the contrct you have is valueless and if challenged you can now prove that it has no legal standing.

As to your tax status, and in line with current (if subject to appeal) legal thinking, what is the reality? Are there significant levels of D&C in your work? What about MOO? If you're clear on them and can demonstrate that you are providing a service at some level, you are outside IR35 whether or not you have an RoS. Furthermore, since you have examined the situation and came to the original conclusion you were outside, and your working practices have not changed, you are not practicising evasion. Worse case is that you lose and have to pay the back tax - but that seems pretty unlikely to me.

[Lewis]

Have you spoken to QDOS? You probably need to at least make them aware of the situation. What do they advise?

[maxima]

some people believe in God, some in Another God, some in UFO, some in MOO. I believe that I am independent from my end client in terms of employement. I believe that my company is taking risks. But would the Judge/Commisioner believe the same?

I do software in the way I want, I work up to their spec but I dont need to be told how to do so. I turn at work at time I like (10 o/c) but I work at least 7hr plus lunch. I took few days off when I didnt have enough things to do. When I get sick or went to holidays - I didnt get paid and if I wont be able to carry on with the contract for 3 consequentive weeks for any reason I will lose it altogether).

I work quite hard to get that money and I'd work that hard only for that level of tax which I expect. Otherwise I'd go to permanent employement and do nothing for smaller money. That is my point. Which differs with current HRMC position.

[maxima]

Have you spoken to QDOS? You probably need to at least make them aware of the situation. What do they advise?

they probably will remove the cover... wont they?

[ASB]

The agent is not required to tell you anything about his contracts with other parties. However, he is also not supposed to write a contract that contains a clause he knows to be unenforceable or unsupported; that is deception (actually a specific form of deception but I can't remember the name of it) and is therefore illegal. HEne the contrct you have is valueless and if challenged you can now prove that it has no legal standing.

I am sceptical that it is deception - unless there is a clause warranting that back to back terms apply, or it formed part of the contractual discussions.

I do not believe that is a breach of contract. Have you had a substitute refused? No. So where is the breach. [Obviously there is a potential breach]

Commercial contracts do not have to be on the same terms. It is very rare they will be. The difference represent business risks and benefits. Simple examples of inevitable difference are payment terms and rates. Equally a sub contractor may tender for an entire job and supply that through various different parties.

My (unpopular) view is that:-

- Hector comes along and IR35's you.
- This hinged on the client saying they would not accept a substitute

So, you try to get recourse. Off we go in front of m'Lud as a commercial dispute. It's going to be difficult.

- You have been IR35'd on a notional contract constructed from the various contracts.
- There was no actual breach of the real contract.
- Even if this went your way you would then need to establish that IR35 would not have happened had the RoS gone through the contract chain.

These seem to me impossibly high hurdles.