contract check too late?

[rurallife]

Hello

I've secured a contract and received it by email yesterday, but haven't had it checked for IR35 yet. The contract starts next Monday, so it's obviously too late now to have it checked. I should have done it, it probably was a mistake, but since it is only a short contract (4 weeks), I thought no one was going to perceive me as en employee. I then read that you can still be inside IR35 and I also read that the following wording might be problematic:

It says "The Contractor shall have reasonable autonomy in relation to determining the method of performance of the Services but in doing so it shall co-operate with the Client and comply with all the Client’s reasonable and lawful instructions." which sounds a bit like they're going to tell me what to do (i.e. lack of control)

I have a few questions:

a) I could still have the contract checked on Monday. Has anyone started working and signed the contract later? Do I need to pay for quick 24-check or could I wait 3-5 working days (with QDOS)? What are the risks of working without a signed contract?

b) If I'm inside IR35, does that mean I'm inside IR35 forever or just for this contract? It's only a short contract, so the tax loss might not be that big.

c) If I have the contract reviewed by QDOS and they say that its wording should be changed will I lose the contract or will the agency (evolutions) be fine with that? How does it usually work?

d) They also have a self-billing agreement that I'm unsure about. What if I refuse to sign it but have already started working for them (without contract)?

Thank you very much for your help and sorry if these questions have been asked a hundred times. I've done some search but haven't found good answers yet.

[TheCyclingProgrammer]

Its not too late to have it checked. If you're not able to make a reasonable evaluation of the contract yourself, you should have it checked and inform the agent/client you will not be starting until you are satisfied with the contract. If they complain, then they shouldn't have left it to the last minute to send you the paperwork.

The statement you posted doesn't necessarily mean they are going to have direction and control over you, but its not very well worded either. There are reasonable requests a client can make and ask you to comply with (e.g. health and safety, security policies) without it meaning they have direction and control over you.

Assuming the scope of the work/project is well defined, I'd still expect the client to have the final say over certain aspects of the project such as prioritisation and infrastructure choices, although if they are engaging you as a professional consultant I'd also expect to have a degree of influence over such decisions too. Direction and control largely relates to how you perform the work but there isn't one single thing that could show the client does or doesn't have D&C - you need to look at the whole picture.

A contract review will give you a better picture of how bad (or not) that statement is and ways in which it could be improved in your favour. I'd certainly like to see "all the Client’s reasonable and lawful instructions" to be better defined. What is reasonable?

To answer your specific questions:

a) IANAL, but I think If you turn up and start work, then you're more or less agreeing to the contract that has been put in front of you. If you're not currently willing to sign the contract, then you shouldn't start work.

b) IR35 is judged on a per-contract basis.

c) Assuming the contract is mostly OK and QDOS get back to you with some suggested changes then you need to negotiate with the agency. Its not unreasonable to negotiate contract terms. If the agency is unwilling to make any changes and QDOS say they think the contract would put you inside IR35 then you need to decide whether you're happy with that and treat the contract as being inside. It depends why QDOS think its inside. If its a few minor nit-picky things I'd be inclined not to worry, especially as its such a short contract. If there's some pretty major problems with the contract then you need to sort them out. Remember that the contract is only part of the story - you need to look at working practices too and make sure they align.

d) Lots of agencies operate self-billing. Its not a problem, it reduces their paperwork. You may want to create duplicates for your own records (especially if you use an online book-keeping system) however you shouldn't issue these invoices - the one that counts is the one the agency give you. Do check invoice they send you though and make sure its correct. If you're going to be billing for any expenses, make sure you check with the agency up front how they treat expenses as far as VAT is concerned. There's no "correct" way but most contractors would prefer to re-bill at gross cost + VAT. Agencies often prefer to re-bill net of the original VAT. There's lots of discussion about this on here - do a search.

[rurallife]

Thank you so much for taking the time to write this very informative and detailed response.

I think I will sign the contract but let the agency know that I will have the contract reviewed and maybe even changed if there will be an extension. I mean I will let them know that there should be a new contract not just an extension if there is more work. The initial contract is actually about evaluating of how much work there will be and it is not even 4 weeks, because a short holiday falls within that period. So the risk seems low and I'd love to start working soon (I've also already booked accomodation and made plans)

At least I've learned that in this country you can' just start working once you have secured a contract. In my home country, Germany, even though there is similar legislation, it usually doesn't affect contractors, so they don't bother with contract checks. But here, you need to plan in sufficient time to have the contract checked and even changed if necessary.

There's no "correct" way but most contractors would prefer to re-bill at gross cost + VAT. Agencies often prefer to re-bill net of the original VAT. There's lots of discussion about this on here - do a search.

I don't really understand what that means, but I will search for it.

Thanks again for your help!

[SpontaneousOrder]

I'm sure others will correct me if I'm way off base, but in this particular instance I'd suggest that for such a short contract perhaps you wouldn't worry about IR35 too much. Yes, you can still be caught - but if you got investigated and coughed up it wouldn't cost you very much.

[CheeseSlice]

if you're worried about IR35 here then delay the start of the contract until the review has completed.
I believe QDOS etc do a quick turnaround if you pay the extra.

[kal]

I'm sure others will correct me if I'm way off base, but in this particular instance I'd suggest that for such a short contract perhaps you wouldn't worry about IR35 too much. Yes, you can still be caught - but if you got investigated and coughed up it wouldn't cost you very much.

+1. If you're worried and its only a 4 week contract you could always use all of the invoice value to pay into your company pension then it doesn’t matter either way if your caught with this one

[rurallife]

Thanks everyone for the peace of mind!

[psychocandy]

That'd be a good one that I'm sure HMRC would love to implement. Do one dodgy contract for a few weeks then every contract after this caught - they now own your soul! lol.

OP - should have got it done before but for a 4 week contract then its not the end of the world IMHO. I'd get it sorted properly though before an extension.

Worse comes to worse, you'll be nabbed for 4 weeks inside IR35.

[Sausage Surprise]

Hello

I've secured a contract and received it by email yesterday, but haven't had it checked for IR35 yet. The contract starts next Monday, so it's obviously too late now to have it checked. I should have done it, it probably was a mistake, but since it is only a short contract (4 weeks), I thought no one was going to perceive me as en employee. I then read that you can still be inside IR35 and I also read that the following wording might be problematic:

It says "The Contractor shall have reasonable autonomy in relation to determining the method of performance of the Services but in doing so it shall co-operate with the Client and comply with all the Client’s reasonable and lawful instructions." which sounds a bit like they're going to tell me what to do (i.e. lack of control)

I have a few questions:

a) I could still have the contract checked on Monday. Has anyone started working and signed the contract later? Do I need to pay for quick 24-check or could I wait 3-5 working days (with QDOS)? What are the risks of working without a signed contract?

b) If I'm inside IR35, does that mean I'm inside IR35 forever or just for this contract? It's only a short contract, so the tax loss might not be that big.

c) If I have the contract reviewed by QDOS and they say that its wording should be changed will I lose the contract or will the agency (evolutions) be fine with that? How does it usually work?

d) They also have a self-billing agreement that I'm unsure about. What if I refuse to sign it but have already started working for them (without contract)?

Thank you very much for your help and sorry if these questions have been asked a hundred times. I've done some search but haven't found good answers yet.

Yes and you must have "IR35" tattooed on a discrete part of your body to help speed up any future HMRC investigation.

[kingcook]

I'm sure others will correct me if I'm way off base, but in this particular instance I'd suggest that for such a short contract perhaps you wouldn't worry about IR35 too much. Yes, you can still be caught - but if you got investigated and coughed up it wouldn't cost you very much.

Agreed - Infact, it would probably cost you more for the contract review.