Saturday, December 18, 2010

UK Contractors - Fight IR35 With a "Clarification of Working Arrangements" Document!

IR35 is a major concern for UK contractors when taking a contract via an agency. Getting clarification on your working arrangements with your client can be key to getting your status correct. It makes sense to draw up a written document and include some or all of the following which may be applicable to your circumstances. Use it to clarify the true nature of how you are performing the contract. For example, point out that you use your own equipment, you work from your own home office, you take liability for mistakes you are responsible for. Try to include some wording or variation thereof along all the following lines:
"The purpose of this document is to recognise the verbal arrangements that have existed between the parties since [date of your contract here]"
"[Your company name here] was introduced to [your client name here] via an agency who insisted on a standard contract which both parties believe is inappropriate. In case of dispute, this clarification overrides the contract."
"Because of the confidential nature of the work involved, [your limited company name here] accepts that any other commercial contracts it undertakes will not be in conflict with this contract."
"It is agreed by both parties that a proportion of the duties will be performed on the client site to facilitate exchange of information and security requirements. This will necessitate that the client's security personnel identify [your company name here] Contracting Team and therefore two week's notice is required for [your company name here] to send a new consultant to the client's premises."
Try to describe the deal as though IR35 is incidental and don't use wording that would immediately flag up and alert a reader to IR35. If you find your client raises objections and suggests your formal contract is enough then justify it by stating your lawyer has insisted you use it.

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