I've been offered a contract through an agency at a government department end client. The contract is defined as 'outside IR35' and I'm very happy with that of course. I know the regulations place the liability for the status determination on the fee payer and so that should give me confidence that I can continue my normal salary/dividend split. However, what if there were a change of personnel or policy at the end client and 12 or 24 months in to the contract they revise the determination to 'inside IR35' (without changes in working practices)?
The agency has written clauses in their contract template that would require me, on being found inside IR35, to supply the services via an umbrella company and to bear liability for all tax implications of the change. This undermines further my confidence that the stated 'outside IR35' status can be relied upon. The full consequence of the client's representation of the contract as outside IR35 being inaccurate would fall on me and not the agency or client. I would certainly not continue with the contract if it were to be inside IR35 so I am challenging the umbrella clause, but I'm still concerned about historic payments at the time of a status change.
I don't want to let this opportunity slip through my fingers, but I need to have certainty about the status and also address the agency's legitimate concerns about bearing the impact of a change. I used to be able to get a contract reviewed and then insure myself against a later 'inside' finding - will any IR35 insurance cover me against the end-client's status determination being changed from outside to inside (and its impact on tax/penalties for payments made historically)?
The agency has written clauses in their contract template that would require me, on being found inside IR35, to supply the services via an umbrella company and to bear liability for all tax implications of the change. This undermines further my confidence that the stated 'outside IR35' status can be relied upon. The full consequence of the client's representation of the contract as outside IR35 being inaccurate would fall on me and not the agency or client. I would certainly not continue with the contract if it were to be inside IR35 so I am challenging the umbrella clause, but I'm still concerned about historic payments at the time of a status change.
I don't want to let this opportunity slip through my fingers, but I need to have certainty about the status and also address the agency's legitimate concerns about bearing the impact of a change. I used to be able to get a contract reviewed and then insure myself against a later 'inside' finding - will any IR35 insurance cover me against the end-client's status determination being changed from outside to inside (and its impact on tax/penalties for payments made historically)?
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