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IR35 row with agency - Any advice?(3 Posts)
Over the last 11 months, my limited company was providing my resource 3 to 4 days a week via a contract with an agency (say called Agency Crap - AC for short) that was contracted to another agency ( say called Agency Big - AB for short), that is then contracted to a Government Department. AC is not my company's only Client and I can choose the work / hours. I am a deep specialist in my field and my company has access to another specialist equally qualified (and security vetted) specialist who can substitute.
11 days before the end of March 17 someone i have never dealt with before at AC called (when i was busy) - lets call them 'Mr. Useless' and said that the agency AB had declared ALL contracts for this Government Client within IR35 and that this would be implemented from the start of April, so if I wanted to carry on with the workload for this Government Dept, I personally would have to work for AC on an umbrella basis. I was surprised as my company was doing some critical work for the Government Dept and also because no one from AC, AB or Government Dept had contacted me to discuss the ESS Test / IR35 & the workload.
As I was busy I asked Mr. Useless to put everything in writing (per the contract my company has with AC - pretty much so I could do my sums / decide to continue with the workstream- as I had no idea what AC would charge to be an umbrella company). I heard nothing ( being manically busy working mum and having a variety of clients) so provisionally planned unilaterally to work on that contract to the end of March and then stop until things were clarified. I later received a phone call late pm, 9 days later - having the same conversation with another person from AC whom I had dealt before (lets call her Mrs. Totally Useless.) She could not give accurate figs on the 'take home' (plus I was driving on hands free so unable to do my own calcs) so i asked again for it all to be put in writing and emailed to the company. I heard nothing and as I didn't hear anything I worked to the end of March (one more day after the last phone call from Mrs Totally Useless) and suspended working on this contract on the 31st March 17. I put the Invoice for the last week worked at the end of March which was 4 days work. The invoice got to AC before 5th April, but the next day someone from the Finance department of AC called to say that AC would not be paying my company and would only pay for the 4 days if they could pay into my personal bank account becasue of the IR35 requirement- still no detail on the Umbrella management fee or how they would deal with holiday pay pension etc etc.
I have written to AC on behalf of my company advising that as AC did not quit the contract in writing (which the contract requires) then they need to pay the company as the work has been provided in good faith. I have made it clear to them also that the contract with AC states that the matter of tax is completely the responsibility of my limited company.
I have also spoken to the FSB tax adviser - who advises that as the contract with AC is 2 times removed from the public sector client then IR35 does not apply per the HMRC advice in March 17 (eg of Janice). Furthermore the FSB commercial law adviser says AC needs to pay as they have not provided formal written notice to terminate the contract.
However AC are saying that they will be breaking the law if they pay my company- and are refusing to pay unless i provide them with my personal bank & tax details. AC are saying that 'I should have known' about IR35 and 'known when it was coming in to force' and represent that it was my company's responsibility to liaise with AB and the Government Department on this and the timings! I think this is pure poppycock - and am getting rather cross. I am used to dealing with professional Agencies and not ones that are so useless.
WWYD? It's 4 days pay but the chimp in me is minded to pass this to a decent commercial solicitor just to teach them a lesson - even if my company makes a loss? Sorry long post but THANKS for any replies.
Ps Just to add - I caught AC taking money off company payments for some 'insurance' policy I had never agreed to in 2016 - they repaid it after 3 months of emails - but I think this provides an indication that AC are a total bunch of clowns.
Because of the extension of IR35 to government contractors, you'll find nearly all agencies now play safe and regard their contractors as being caught by IR35 if the contractor (i.e. you) is working for a government agency, regardless of how long is the chain of intermediaries. That means that most will insist on umbrellas as they have no way of ensuring that you are complying with IR35 so they won't risk paying limited company contractors anymore.
Look at IPSE, they will argue the toss on your behalf if you are a member.
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