'IPSE Friendly' contract failed by QDOS

[normalbloke]

I have QDOS TLC35 cover, and sent my latest contract to be reviewed by them. It was boderline fail , mainly to do with the Substitution clause. I sent the QDOS summary to the agency and asked for a rewording of the clause as suggested by QDOS. Agency came back with

'Firstly, it has to be noted that our terms have been certified as IR35 friendly by IPSE, of which AGENCY X is a member - their logo can be seen at the bottom of our standard terms. Whether a contract falls inside or outside of IR35 will depend on the individual circumstances and will be assessed on a case by case basis by HMRC – that is why any third party assessment will have an element of subjectivity to it, which is also the case with the attached report.'

The response by QDOS was sorry, 'IPSE IR35 friendly' or not, it still won't wash.

I am NOT a member of IPSE but I'm thinking that they might like to know that QDOS has an issue with a contract that they appear to endorse.

Anyone else had a similar issue?

[malvolio]

IPSE don't afaik, certify any agency contracts but many agencies use the basic IPSE contract as written by Egos and verified by Accountax/Abbey. Unless the agency has re-written something it shouldn't be an issue; certainly the standard RoS clauses are correctly framed. Perhaps you should be asking QDOS why they think it's wrong?

[MicrosoftBob]

Perhaps they don't like competition and thus err on the side of caution to fail IPSE contracts

I'm not saying there is a conflict of interest but follow the money

[jamesbrown]

Perhaps they don't like competition and thus err on the side of caution to fail IPSE contracts

I'm not saying there is a conflict of interest but follow the money

If they are reviewing the standard IPSE contract, then I would agree, as it is properly drafted, no doubt about that. Also, I don't think agencies can "join" IPSE as such, so I'd query the point about them being a "member"? Perhaps someone is confused, i.e. they've taken the IPSE template, FUBARED it, and called it an endorsement. Mal or someone else can confirm w/r to "membership"...

[TheFaQQer]

If they are reviewing the standard IPSE contract, then I would agree, as it is properly drafted, no doubt about that. Also, I don't think agencies can "join" IPSE as such, so I'd query the point about them being a "member"? Perhaps someone is confused, i.e. they've taken the IPSE template, FUBARED it, and called it an endorsement. Mal or someone else can confirm w/r to "membership"...

Agencies can be an affiliate member, so they are OK to say that they are members, as long as they are. I'm not sure if there is a directory any more of affiliates.

[TheFaQQer]

IPSE review contracts for agencies, and as long as the contract hasn't deviated from that reviewed by IPSE then they should be fine.

So, I'd go back to what Mal has said, and ask for information about what Qdos think is wrong with the contract.

[malvolio]

Agencies can be an affiliate member, so they are OK to say that they are members, as long as they are. I'm not sure if there is a directory any more of affiliates.

There is a list somewhere on the website. And as long as nobody has changed anything, then it's a pass for IR35, always assuming the working practices agree with the contract of course.

And re-reading the OP I'm with the agency. Pointless having an IPSE approved contract then being asked to change it...

[mudskipper]

There is a list somewhere on the website. And as long as nobody has changed anything, then it's a pass for IR35, always assuming the working practices agree with the contract of course.

And re-reading the OP I'm with the agency. Pointless having an IPSE approved contract then being asked to change it...

Affiliates are listed here https://www.ipse.co.uk/supplier-directory

I'd feel inclined to ask them what IPSE approved means.

Is their contract altered from the standard IPSE template? If so, then to me it seems they should not say it's IPSE approved. If not, then it would be good to understand what it is that QDOS have taken issue with.

[jamesbrown]

If not, then it would be good to understand what it is that QDOS have taken issue with.

Frankly, if it uses the unmodified IPSE template, it doesn't matter what they've taken issue with in the contract itself (except as a point of interest). Yes, there's a degree of subjectivity, especially in working practices, but I have a hard time picturing this for a standard RoS clause on a contract template that is well vetted, i.e. either the agency is playing silly buggers, or QDOS are mistaken, and I'd bank on the former, even though the agency appears to be reasonably well-informed.

[normalbloke]

Blow by blow account so far...

OK... thanks guys for all your comments so far. So ....

What the contract says currently - agency say this is IPSE IR35 Friendly:

1.4 The Company shall make available and maintain continuity of service in respect of the Consultants who shall be responsible for the provision of the Services for the duration of the Contract Period. The Company shall not substitute any Consultant (unless he is unable to continue for reasons such as illness, holidays or termination of employment or engagement with the Company) except with Client's prior written consent.
1.5 If a Consultant is unable to provide the Services due to illness or injury, the Company shall advise Square One of that fact as soon as reasonably practicable, and where appropriate, but only with the consent of Client, arrange for the Services to be provided on a temporary basis by an alternative, but no less well qualified, Consultant


This is QDOS opinion

The Schedule – Clause 1.4 – The right to provide a substitute is one of the most important tests in determining IR35 status. It is therefore crucial there is a strong clause within your contract and that your right to provide a substitute is a genuine one, i.e., recognised by your end client. Not having a genuine right could significantly weaken the prospects of success in the event of an IR35 enquiry. This clause is quite restrictive and I would suggest removing this clause and replacing it with the following. ‘The Supplier shall provide the services using suitably qualified personnel of their own choosing. The Supplier reserves the right to substitute any personnel, provided the Client is reasonably satisfied that the substitute possesses the necessary skills and qualifications for the satisfactory completion of the services. The Supplier will remain liable for the services completed by substitute personnel and will bear any costs.’

And this is Agency reply:

Schedule, Clauses 1.4 and 1.5; Standard Terms of Business, clause 5.4: In relation to the remaining comments, regarding substitution: the right of substitution has to be balanced against the Client’s right to decide who will take part in the project and have access to their premises and/or systems – substitution which does not require Client’s prior consent would unreasonably restrict that right. The existing clause still provides wide scope for substitution, subject only to suitability of the candidate and Client’s approval.


If the current clauses 1.4 and 1.5 are IPSE 'approved' then I'm happy to stick with it. I can't see the current IPSE template as I'm not a member.