Does The Ir35 Proof Scheme Really Exist

[Bookworm]

After reading so many comments here on CUK and the straight talking and genuine advice about the many schemes that exist, I find myself in uncharted waters. Having done the rounds of many of the big boys, spoken to accountants, umbrellas, ebts I wonder if I am searching for the holy grail.

I am returning from the wilderness, ie permie position, and rejoining the land of giants only to find that every agency that calls me continues to pedal their web of deceipt with IR35 friendly contracts. I can only assume that that the word friendly means something different to agencies: it does to regular IT folk suffice to say I am keen to discover;

DOES THE IR35 PROOF SCHEME REALLY EXIST

My deliberations lead me to several complicated and exhausting conclusions which without wanting to sound to pessimistic, mean that whichever path I tread, our old friend Mr Taxman, will undoubtedly look to investigate at some time in the future

So in the real world of IT contracting, does the Holy Grail exist... is there a scheme that can deliver this most illusive prize.

[nobody here but us chicke]

ir35 proof?

Yes,

dont be a like an employee. Contract with clients to complete a task or provide a service. Then do so.

This advice does not apply to those bum-on-seat contracters who operate through agents.

[Bookworm]

MMMMMMMmmmmmm

Great to get such a simple answer, however being a bum on seat contractor at the moment, and having used all my magic dust, I can only wish I was as lucky as yourself, so I have to deal with the agencies.

I have been out of the loop for some time but thought that a huge proportion of contracts are with the agencies.. or at least the clients that I have talked to...

willing to listen and learn

[malvolio]

Bst trick is not to get investigated. If you have your own company, behaving like a business and not paying yourself stupidly low wages is one way to stay off Hector's radar screens, of course. If you're with an umbrella, it's a lot less clear about how IR35 proof you can be. Do not go anywhere near EBTs or offshore schemes.

As time progresses, we're finding that magic bullets to get you out of IR35 are getting scarcer and scarcer...

Current thinking is that, in an ideal world, your contract needs to contain an unfettered right of subtitution, you need to be clearly out of reach of any direction and control by the end client and you do not have to accept work offered, nor do they have to offer you work (which is as brief as you can get describing Mutuality of Obligation!). Whether or not those provisions are reflected in the agency/client contract is another interesting question, of course.

As a rule of thumb, Big Agency contracts (but not all) will not do this, anyone using a Lawspeed, PCG approved or similar model probably will.

Best advice is to read the PCG guides to freelancing, IR35 and S660 and get some carefully chosen IR35 investigation insurance.

[tim123]

Current thinking is that, in an ideal world, your contract needs to contain an unfettered right of subtitution, you need to be clearly out of reach of any direction and control by the end client and you do not have to accept work offered, nor do they have to offer you work (which is as brief as you can get describing Mutuality of Obligation!).

I don't agree with this final bit. If you get the other two MOO is irrelevent.
MOO is only a one way switch, I.e No MOO means that you cannot be an employee, having MOO in the relationship means nothing.

But the claim by some that No MOO can be achieved (in a typical freelance contract) is IMHO false. It is a Holy Grail that no-one has yet to achieve. If it had been achieved we'd all know about it and would all have friendly IR35 contracts. It is really hard to have no MOO in a contract, merely being able to refuse work is not enough. You have to be able to down tools half way through a job, bill for the bit that you've done and walk out on zero notice. No client (of a freelance professional) is going to agree to those terms.

tim

[tim123]

I am returning from the wilderness, ie permie position, and rejoining the land of giants only to find that every agency that calls me continues to pedal their web of deceipt with IR35 friendly contracts. I can only assume that that the word friendly means something different to agencies: it does to regular IT folk suffice to say I am keen to discover;

DOES THE IR35 PROOF SCHEME REALLY EXIST

Possibly, but it doesn't live in isolation to the client. Whatever terms you have in the contract (with the agency) to make it IR35 friendly, have to be reflected in the actual working arrangement. To get an IR35 contract you *must* have support from a client, without that you are P1ssing in the wind, whatever the agency contract says.

tim

[Bookworm]

Reality has size ten boots

Understood by the comments coming back that the suggestions are based on what I can only perceive as potentially unrealistic. Agencies dictate what is in their contracts, and although push & shove happens, we all want to work. MOO surely cannot exist from a practical perspective, or if there is a clause inserted to allow a contractor to substitue, then who's client is going to let them without some say in the matter.

I concur with Malvolio, EBTs and offshore would be financial suicide and I am not quite ready to fall on Hectors sword

Holy Grail..... well if someone stumbles across this path of enlightenment then surely Hector is going to notice anyway.

[malvolio]

MOO can exist in a B2B arrangement and can be factored into the more traditional supplier/agency/client sequence - but think about the reality for a moment. Would you be happy to engage a plumber to fit a bathroom who was allowed to walk away once he'd stripped out the old one with no comeback?? Possibly not... That is why it is not evident in most contracts.

But given there is a formal contract defining the work to be done, you can refuse to do work outside that description, hence no MOO. A permie can be delegated to tidy the office, a contractor can't. A permie cannot refuse to abide by his employer's instructions, a contractor can refuse his client's. That in both cases you'd probably get terminated is neither here nor there legally, the clear distinction remains.

[Bookworm]

Still need convincing !!!!!!

Malvolio, thanks for your insight into the MOO situation, just not sure that I want to deal with the complexity of arguing my case with any agency. think that I would get shot down by the bully boys.

Seems to me that the end of the IR35 proof rainbow really does have a ton of gold waiting to be discovered. Call me a dog with a bone but I am just going to keep digging, must be someone out there that has a simple solution. Naive I am not, patient I am.

Quite obviously IR35 and proof should not be used in the same sentence.

[tim123]

MOO can exist in a B2B arrangement and can be factored into the more traditional supplier/agency/client sequence - but think about the reality for a moment. Would you be happy to engage a plumber to fit a bathroom who was allowed to walk away once he'd stripped out the old one with no comeback?? Possibly not... That is why it is not evident in most contracts.

I presume that you mean that is why it IS evident in most contracts.

But given there is a formal contract defining the work to be done, you can refuse to do work outside that description, hence no MOO.

Wrong. Being required to do the work that IS in the contract (and for the company to pay you if you do) is MOO.

Once again, MOO has nothing to do with you agreeing, or otherwise, to do stuff outside of the contract (or beyond it). It is all about being obliged to do the stuff that is in the contract.

tim