How to Get an IR35 Compliant Contract

Your working practices remain as the most crucial aspect of determining your IR35 status, but it is your written contract which will receive the first scrutiny, so it is just as important to ensure that this is compliant as it is the day-to-day running of your business.

The first step to getting an IR35 compliant contract is to get a professional assessment. Qdos offer a variety of options for this and have been reviewing contractor’s IR35 status since the legislation was implemented. Assessments are inexpensive and our basic assessment (the actual assessment is no more basic than any other but this option will only provide you with an overall pass/fail plus necessary amendments as opposed to a detailed report) is free with most of our insurance policies.

However, what happens after a review when it has failed? Perhaps it has failed on something which is not entirely the case in reality and so should be changed, or the wording just isn’t quite up to scratch, or maybe there is something which you feel your agency/end user may waiver (this must be true in reality as well as in the contract). It is financially preferable for a contractor to be outside of the legislation (pass an assessment) so if the first point of scrutiny fails, it is worthwhile taking the time to negotiate changes with your agency or end client.

Your powers in negotiating changes to your contract will be effected by a number of things. The first major one is whether you have signed it or not. A signed contract already holds you to its terms and so trying to change them post-agreement is notoriously difficult and often impossible. It is always advisable to have your contract reviewed prior to signing (Qdos have 24 hour services available for those pressed for time) as this will allow you the chance to request adjustments. This goes for renewals too. It is much harder to change the terms for a renewing contract than for a commencing contract, as you agreed to them once, why won’t you agree to them again? Ensure the terms are suitable from the first contractual agreement you make with an agency or end user.
Secondly is the current market health. During times where contracts are plentiful, you might find it easier to bargain for changes as you could easily find another contract elsewhere which is compliant, and therefore more financially desirable. Agents are likely to be having a harder time filling all the contracts and therefore will not want to spend time on you for you to go elsewhere, so are more likely to budge. On the contrary, during times where contracts are scarce, you will likely find it more difficult to get amendments made. Agents want signings fast and so will not care for messing around with changing contracts when there is probably a queue of other suitable contractors lined up to whip up the contract without any fuss.

Getting changes made to the written contract can be very difficult. It takes time with the legal department that the recruiter doesn’t want to spend, so you may find negotiations run a little smoother if you request to deal with whoever deals with the contract terms directly, or even better, make use of a lawyer to do it for you (although be sure that the cost of this would be worthwhile). If it is a renewing contract which you are trying to change, you may wish to try speaking with your end client who might put some pressure on the agency should they believe the contract problems will cause you to not renew. Be careful not to cause rifts and burn bridges in the process and know when it is time to buckle under or go elsewhere. If you want the contract regardless, it is especially important to know when to cut your losses and whilst you are spending time trying to negotiate contractual changes, the agent could simply be spending their time looking for someone else.

Qdos understand the difficulties involved with negotiating contractual changes, which is why we will liaise with your agency or end client on your behalf included as part of our contract review services if required, allowing us to properly explain the changes needed to your written contract so you can get the best out of what you do. As well as this useful service, we also deal with many recruitment agencies, reviewing their standardised contracts so that you know they are offering you a contract which is compliant from the start and even offer an incentive scheme to agents to encourage them to be vigilant of IR35 compliance. Contractors, agencies and end clients all play a part when it comes to IR35 compliance; we are looking to a brighter future where everyone works together with mutual understanding and cooperation.

By:Jane Hailstone

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