IR35 contracts - mirroring contracts

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"Agency to client" contract:

Most contractors find their customers via recruitment consultants (agencies). It is usual for the contractor's company to contract with the agency and for the agency to contract with the end client. During IR35 investigations the Revenue have sometimes focussed on the "agency to client" contract and there is a reason for this.

The Revenue argue that although the contractor's company might have a contract with the agency that suggests self employment, the reality of the working arrangements under which the services are provided could well indicate employment. One way they can add weight to this argument is if the "agency to client" contract is NOT a mirror of the "contractor to agency" contract.

The Revenue's argument is that if the "agency to client" contract suggests employment rather than self employment, it is likely that the physical working arrangements amount to employment rather than self employment. Their subsequent point would be that if the physical working arrangements amount to employment then it must be employment.

Clearly, therefore, it pays to ensure that your contract has a many as possible of the attributes we have previously described and that the "agency to client" contract is a mirror of the contract your company has with your agency.

However, be warned that even though your contracts might be mirror images, the Revenue are still likely to attempt to establish that the physical working arrangements amount to employment. We referred to this in our "IR35 Enquiries" section and suggest how you can circumvent this in our "Beat IR35" section.

Summary:

In the event of an IR35 investigation, your contract will be one of the main areas on which the Inspector will focus. We have mentioned above the attributes your contract should ideally have. We have also mentioned the importance of ensuring the contract your agency has with your client is a mirror of the one your company has with your agent. However, during an IR35 investigation, your contract will not be the only thing under scrutiny (see our "IR35 Enquiries" section).

When you are starting up as a contractor, your contract will probably be the only thing you have to help you assess whether or not you are in the IR35 firing line. There are a number of companies who will undertake a review of your contract and will be able to advise as to whether or not they think it will beat IR35. Follow our guidance in this section to try to make sure your contract is as good as possible from the beginning. Also follow the guidance in our "Beat IR35" section to help you ensure your arrangements on an ongoing basis are robust.

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IR35 Rules - page 1 IR35 Rules - page 2 Beat IR35 - page 1 Beat IR35 - page 2

Beat IR35 - page 3 Beat IR35 - page 4 Ltd Company - page 1 Ltd Company - page 2

Ltd Company - page 3 Ltd Company - page 4 Umbrella Companies - page 1

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IR35 Investigations - page 1 IR35 Investigations - page 2 Contracts - page 1

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