Feel like agency is tricking me..........not a good start to IR35....

[mosaslop]

I was put forward for an interview via an agency. It was for what they termed a 'temp' job where i'd be a contractor, and the contract is 6 months.
I successfully passed the interview and they made me an offer the very same day (17th June)

The agency gave me 2 options:
- join an umbrella company
- start my own limited company

i did the research, and decided to start my own limited company. All i've done so far is register it with companies house and become incorporated.
the agency have only just sent me earlier today (20th) the contract and all kinds of documents.

Here is the very first thing it says on the contract:

TERMS OF ENGAGEMENT OF LIMITED COMPANY CONTRACTORS (where the Contractor is under the supervision, direction or control of the client AND has opted out)

(These Terms are for use where the Contractor will be under the direction, supervision or control of the client i.e. the arrangement does not meet the tests of self-employment AND the limited company contractor HAS opted out of the protection of the Conduct Of Employment Agencies and Employment Businesses Regulations 2003)

ALREADY i'm immediately inside IR35.....its not even ambiguous. The recruitment consultant who landed me the contract didn't even know what IR35 was!
The agency have told me that from the client side, I am a contractor, but from the agency side, i am simply a temp worker. She put this down to 'different terminologies being used'.

Obviously i have an idea of what i'll be doing, via the job description, but i dont yet know if i'll need to report to anyone, how much independence I have, exactly what my working practice will be like....and i'm only going to know for sure after the first couple of days. I haven't even set up the business bank account yet.

My day rate is £140. £140 x 5 days x 52 weeks = £36400. This is the gross salary I would expect, if I was a permanent employee doing this job i'm about to do. If I type £36400 into thesalarycalculator.co.uk, I get a take home pay weekly figure of £106.04.

So......this is my target. This is net amount I believe I should be earning from this job, if i was a permanent employee for the client. Therefore as a contractor, I want whatever will equate to this, whether its through an umbrella company or my own.

My expenses will be minimal - again - i dont know yet what equipment I will need, whether I'll need to purchase my own laptop/software etc, so ignoring that to one side, i Know that my mileage will be 160 miles per week, and food of £25 a week.

I have 2 concerns:

- Being inside IR35
ignoring the claimable expenses against tax, will my take home pay weekly figure be around this £106 a week?

- negotiating to make contract outside IR35
will this be even possible? i wasn't even planning on becoming a contractor, it just so happens that this was a job I was put forward for by the agency, i passed the interview and i'd be happy working there. Then they told me i'd effectively be a contractor and it opened up this whole new world. I don't even care......as long as i am paid a net amount equivalent to a gross salary of £36400 i'll be happy.

But if there is a possibility to actually make this contract outside IR35, i obviously want to do anything i can to make it happen. The way the agency are applying pressure for me to sign, and the urgency with which they want me to start, is making this very difficult for me to even try.

i am lost, totally lost and confused.
is there anyone out there who can help me.

[Malcolm Buggeridge]

Crikey, I don't know where to begin but if I were you I'd put your feet up and enjoy the summer. September will be along soon enough with a whole raft of new opportunities.

£140/day with those clauses? Pah!

[thunderlizard]

negotiating to make contract outside IR35
will this be even possible

Probably. The bit you've quoted in bold says to me that they also have a boilerplate contract for a not-under-supervision arrangement. Try telling them they've sent you the wrong one.

however, this still leaves the question of whether the client is OK with an out-of-IR35 way of working. That's harder to suss. You really need to discuss that directly with them. When doing something like that you need to remember 2 things about how agents work
(1) What they want is to get you to sign ASAP so they get their commission. So they'll initially say "no, can't be done".
(2) however, once they've got the smell of cash in their nostrils, and you start sticking up for yourself, they can be surprisingly flexible if they start to fear they might not get that commission after all. So say there are a few things you'd like to iron out with the client just before you sign, and away you go.

[Wanderer]

Try telling them they've sent you the wrong one.

Yep.

And don't opt out either.

[mosaslop]

Yep.

And don't opt out either.

why are you so sure of this?
i've read Opt-in, opt-out?Legal specialist Egos comments :: Contractor UK

basically its saying the regs dont apply to IR35 so by opting out i'm less 'safe' in terms of payments from the client (the agency has to pay).
but in the 2nd link it does say that it does send a negative message to HMRC about control.

surely the safer thing to do is to opt out? i guess its been made clear that the regs don't even matter regarding IR35, but then why in the other forum thread has someone said this:

'What the canny player will do is say, OK, I'll opt out but I want these changes in my contract to get me away from IR35.'

[cojak]

There will be different opinions about opting in and out.

Read them and make your own mind up.

[LisaContractorUmbrella]

What is it that you are going to be doing? It's all very well getting the contract re-written but if it doesn't accurately reflect your working practices it wont do you much good in the event of an investigation.

[malvolio]

Opt out is nothing to do with iR35. Direction and Control very much is. I suggest you go to t he PCG website at www.pcg.org.uk , download their Guide to Freelancing and get reading. What you don't do is take advice from the agency, who know nothing and have a vested interest contrary to your own, or the client, who simply know nothing,.

Short term, for that money, I'd go umbrella and save all the hassle. You will at least then have time to learn what it is you're getting into. And for the record, £140 a day is roughly equivalent to a salasry of £17.500 in terms of how much net you'll get at the end of the day.

[Dominic Connor]

why are you so sure of this?
i've read Opt-in, opt-out?Legal specialist Egos comments :: Contractor UK

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Oh my God.

You're taking legal advice from Roger Sinclair (egos), really ?

Why ?

[northernladuk]

To the OP. Get your contract over to Baur & Cottrell (can't remember spelling). They will check it over for you and re-negotiate it with the agent to get it back inside... Easy..

First thing to do with all contracts is get it checked by these people or QDOS and then go back renegotiate.

Bauer & Cottrell - Expert IR35, Section 660 and Employment Status Advice