Need some legal advice - Contract - Long ....sorrry !
Discussion
I am an I.T contractor and recieved this from my agency and I need a bit of help understanding it correctly.
We write pursuant to the Statement of Terms for Project Services between ourselves dated the above referenced Agreement to confirm that with effect from the date of signature of this here letter of variation (“Variation”) the parties hereby agreed to vary the Agreement to the extent detailed herein.
Variation
The following terms are incorporated into the terms of the Agreement.
1 Company will maintain (and subject to applicable law provide to AGENCY upon request) relevant business, technical and accounting records (i) to support Company's invoices, (ii) to demonstrate compliance with Company's performance of its regulatory compliance and security-related obligations under this Agreement, and (iii) proof of required permits and professional licenses, for a period of time as required by applicable local law, but not for less than six (6) years following completion or termination of the Agreement. All accounting records will be maintained in accordance with generally accepted accounting principles.
2 Upon AGENCY s notice to audit and at no additional charge to AGENCY, Company shall provide AGENCY (including its Client, auditors and any regulators) access at reasonable times (or in the case of regulators, at any time designated by such regulators), to any facility at which Company is providing Project Services under this Agreement and to all systems, data and records relating to such Project Services for purposes of auditing Company's performance of its obligations under this Agreement, including to verify compliance with applicable laws and the protection and integrity of AGENCY Client and Client’s customer data. Company shall also identify a focal point to support the audit and promptly respond to all reasonable requests for information from AGENCY regarding the foregoing, including completing periodic compliance-related questionnaires and providing supporting documentation and other data.
3 “Tax/Taxes” means any and all applicable taxes, charges, fees, levies or other assessments imposed or collected by any governmental entity worldwide or any political subdivision thereof and however designated or levied on sales of deliverables and/or services, or sales, use, transfer, goods and services or value added tax or any other duties or fees related to any payment made by AGENCY to Company for Deliverables and/or Services provided by Company to AGENCY under or pursuant to this Agreement; exclusive, however, of any taxes imposed upon the net income or capital of Company, any taxes in lieu of such net income taxes and any other taxes which are to be borne by Company under law.”
3.1 Where relevant, Company shall account for all applicable Taxes, if any, by tax jurisdiction and with a proper breakdown between taxable and non-taxable Deliverables and Services to AGENCY Company assumes responsibility to timely remit all Tax payments to the appropriate governmental authority in each respective jurisdiction. Company and AGENCY agree to cooperate to minimize, wherever possible and appropriate, any applicable Taxes, and provide reasonable notice and cooperation in connection with any audit. Company shall also bear sole responsibility for all taxes, assessments, or other levies on its own income, leased or purchased property, equipment or software. If AGENCY provides a direct pay certificate, certification of an exemption from Tax or reduced rate of Tax imposed by an applicable taxing authority, then Company agrees not to bill for or pay any such Tax unless and until the applicable taxing authority assesses such Tax, at which time Company shall request and AGENCY agrees to pay any such Tax that is legally owed.
3.2 AGENCY shall withhold Taxes as required under applicable law on payments made to Company hereunder and shall be required to remit to Company only the net proceeds thereof. AGENCY agrees to remit in a timely manner all Taxes withheld to the appropriate government authority in each respective jurisdiction. Upon AGENCY request, Company will deliver the appropriate documentation as required by the corresponding jurisdictional tax laws, within 15 business days from such request.
3.3 Company will reimburse AGENCY for any claims by any governmental or taxing authority, relating to Taxes paid by AGENCY to Company and for any penalties, fines, additions to Tax or interest thereon, imposed as a result of Company’s failure to timely remit the Tax payment to the appropriate governmental authority in each respective jurisdiction. Company shall also reimburse AGENCY for any claims made by a governmental or taxing authority for penalties, fines, additions to Tax and the amount of interest thereon imposed with respect to Company's failure to bill AGENCY for the correct amount of Tax.
f you do not sign and return this Variation within seven (07) days and continue to provide Project Services, you will be deemed to have accepted the terms of this Variation."
Also, how do I reply to the last sentence.
We write pursuant to the Statement of Terms for Project Services between ourselves dated the above referenced Agreement to confirm that with effect from the date of signature of this here letter of variation (“Variation”) the parties hereby agreed to vary the Agreement to the extent detailed herein.
Variation
The following terms are incorporated into the terms of the Agreement.
1 Company will maintain (and subject to applicable law provide to AGENCY upon request) relevant business, technical and accounting records (i) to support Company's invoices, (ii) to demonstrate compliance with Company's performance of its regulatory compliance and security-related obligations under this Agreement, and (iii) proof of required permits and professional licenses, for a period of time as required by applicable local law, but not for less than six (6) years following completion or termination of the Agreement. All accounting records will be maintained in accordance with generally accepted accounting principles.
2 Upon AGENCY s notice to audit and at no additional charge to AGENCY, Company shall provide AGENCY (including its Client, auditors and any regulators) access at reasonable times (or in the case of regulators, at any time designated by such regulators), to any facility at which Company is providing Project Services under this Agreement and to all systems, data and records relating to such Project Services for purposes of auditing Company's performance of its obligations under this Agreement, including to verify compliance with applicable laws and the protection and integrity of AGENCY Client and Client’s customer data. Company shall also identify a focal point to support the audit and promptly respond to all reasonable requests for information from AGENCY regarding the foregoing, including completing periodic compliance-related questionnaires and providing supporting documentation and other data.
3 “Tax/Taxes” means any and all applicable taxes, charges, fees, levies or other assessments imposed or collected by any governmental entity worldwide or any political subdivision thereof and however designated or levied on sales of deliverables and/or services, or sales, use, transfer, goods and services or value added tax or any other duties or fees related to any payment made by AGENCY to Company for Deliverables and/or Services provided by Company to AGENCY under or pursuant to this Agreement; exclusive, however, of any taxes imposed upon the net income or capital of Company, any taxes in lieu of such net income taxes and any other taxes which are to be borne by Company under law.”
3.1 Where relevant, Company shall account for all applicable Taxes, if any, by tax jurisdiction and with a proper breakdown between taxable and non-taxable Deliverables and Services to AGENCY Company assumes responsibility to timely remit all Tax payments to the appropriate governmental authority in each respective jurisdiction. Company and AGENCY agree to cooperate to minimize, wherever possible and appropriate, any applicable Taxes, and provide reasonable notice and cooperation in connection with any audit. Company shall also bear sole responsibility for all taxes, assessments, or other levies on its own income, leased or purchased property, equipment or software. If AGENCY provides a direct pay certificate, certification of an exemption from Tax or reduced rate of Tax imposed by an applicable taxing authority, then Company agrees not to bill for or pay any such Tax unless and until the applicable taxing authority assesses such Tax, at which time Company shall request and AGENCY agrees to pay any such Tax that is legally owed.
3.2 AGENCY shall withhold Taxes as required under applicable law on payments made to Company hereunder and shall be required to remit to Company only the net proceeds thereof. AGENCY agrees to remit in a timely manner all Taxes withheld to the appropriate government authority in each respective jurisdiction. Upon AGENCY request, Company will deliver the appropriate documentation as required by the corresponding jurisdictional tax laws, within 15 business days from such request.
3.3 Company will reimburse AGENCY for any claims by any governmental or taxing authority, relating to Taxes paid by AGENCY to Company and for any penalties, fines, additions to Tax or interest thereon, imposed as a result of Company’s failure to timely remit the Tax payment to the appropriate governmental authority in each respective jurisdiction. Company shall also reimburse AGENCY for any claims made by a governmental or taxing authority for penalties, fines, additions to Tax and the amount of interest thereon imposed with respect to Company's failure to bill AGENCY for the correct amount of Tax.
f you do not sign and return this Variation within seven (07) days and continue to provide Project Services, you will be deemed to have accepted the terms of this Variation."
Also, how do I reply to the last sentence.
Edited by Just an old porsche fan on Wednesday 10th August 08:55
Edited by Just an old porsche fan on Wednesday 10th August 09:47
First, I think you may have left the agency's name in a few times, you may wish to redact that. Are you "Company", are E*****s "AGENCY" and their client "client"?
Your first port of call should be your agency, and you need to ask them what they are expecting you to do. Your accountant may also be able to help.
Regarding the final sentence, you may wish to respond by saying that you are seeking appropriate advice and so, whilst you will continue to provide Project Services as you must in accordance with your existing contract(s), you are not in a position to accept the terms of the variation until you are in receipt of that advice.
Your first port of call should be your agency, and you need to ask them what they are expecting you to do. Your accountant may also be able to help.
Regarding the final sentence, you may wish to respond by saying that you are seeking appropriate advice and so, whilst you will continue to provide Project Services as you must in accordance with your existing contract(s), you are not in a position to accept the terms of the variation until you are in receipt of that advice.
lostmotel said:
First, I think you may have left the agency's name in a few times, you may wish to redact that. Are you "Company", are E*****s "AGENCY" and their client "client"?
Your first port of call should be your agency, and you need to ask them what they are expecting you to do. Your accountant may also be able to help.
Regarding the final sentence, you may wish to respond by saying that you are seeking appropriate advice and so, whilst you will continue to provide Project Services as you must in accordance with your existing contract(s), you are not in a position to accept the terms of the variation until you are in receipt of that advice.
Now removed just in case.Your first port of call should be your agency, and you need to ask them what they are expecting you to do. Your accountant may also be able to help.
Regarding the final sentence, you may wish to respond by saying that you are seeking appropriate advice and so, whilst you will continue to provide Project Services as you must in accordance with your existing contract(s), you are not in a position to accept the terms of the variation until you are in receipt of that advice.
Yes I am company and E**** are the agency.
bad company said:
I would write back to the agency and ask them to explain what they are saying in PLAIN ENGLISH.
The bit at the end about you being deemed to have accepted their terms if you don't reply would never stand up in Court.
Interesting you say that because my ex-employer used, not signing a contract but still turning up for work was automatic acceptance of the contract!!The bit at the end about you being deemed to have accepted their terms if you don't reply would never stand up in Court.
Just wondering if a way round it might be to annotate the contract and sign it based on them accepting your annotations, whereas not signing anything would (Doubfully as per bad company) create the agreement, but if you've signed but put the ball back into there court it might offer you some protection against there farcical not signing is agreeing rule?? Not sure worth considering?
Danattheopticians said:
Interesting you say that because my ex-employer used, not signing a contract but still turning up for work was automatic acceptance of the contract!!
Just wondering if a way round it might be to annotate the contract and sign it based on them accepting your annotations, whereas not signing anything would (Doubfully as per bad company) create the agreement, but if you've signed but put the ball back into there court it might offer you some protection against there farcical not signing is agreeing rule?? Not sure worth considering?
Simply turning up for work, doing as you're told and getting paid can imply there is at least a contract of employment in place with the statutory protections and obligations that go with it.Just wondering if a way round it might be to annotate the contract and sign it based on them accepting your annotations, whereas not signing anything would (Doubfully as per bad company) create the agreement, but if you've signed but put the ball back into there court it might offer you some protection against there farcical not signing is agreeing rule?? Not sure worth considering?
IANAL, however my understanding would be that if your employer put a written contract in front of you, absent any comment from you contradicting the terms, and your conduct if you continue working as per that contract, your acceptance of it might be implied.
bad company said:
The bit at the end about you being deemed to have accepted their terms if you don't reply would never stand up in Court.
It's something (at least some) utilities companies use, and I'm sure they are not alone.(As in, we have started using a standing monthly charge whether you use any gas/electricity or not, if you remain a customer then you agree to this change/charge.)
Just an old porsche fan said:
I am an I.T contractor and recieved this from my agency and I need a bit of help understanding it correctly.
Addressing some of the specifics...Are you currently operating using a personal service (Limited) company or an umbrella company? Are you currently operating inside IR35 or outside IR35? Have you heard of IR35?
From what is written it appears that the agency will withhold the personal tax liable to your company invoices and will pay the tax to the tax authorities on your behalf. Is this what you are aware of?
How does the agency know the correct amount of tax to withhold in your particular case. Is it likely that excess tax will be withheld and somehow you will need to reclaim the balance from the tax man?
Is this the death of contracting?
Looks more like a 'follow correct accounting procedures' and 'dont forget if you're going to hide behind a limited company as a contractor, the limited company needs to act like one'. And 'if the tax man decides you were really an employee and not a contractor and upon review expects us to pay your tax that we've not deducted, you will refund us those taxes', and variations on that theme.
If the contract allows them to vary the terms (or largely just clarify reasonable legal obligations) then you can accept them or stop work. They're not employing you, they are buying a service from your company. Big difference.
If the contract allows them to vary the terms (or largely just clarify reasonable legal obligations) then you can accept them or stop work. They're not employing you, they are buying a service from your company. Big difference.
Contractor too so I'll add my opinion. Sounds like it is in prep for the new Public Sector IR35 rules. Nothing there I would be too concerned about, they appear to think if you are IR35 caught then they may be liable for the taxes. I'm yet to see the firm proposals.
One plus is they intend cooperating with you regarding status, so they don't intend (contractually) to simply follow the path of least resistance.
One plus is they intend cooperating with you regarding status, so they don't intend (contractually) to simply follow the path of least resistance.
I'm interested in why you'd suggest doing nothing? Contract changes can have implied acceptance which would be the risk if one did nothing.
bad company said:
BertBert said:
You can simply write back and say you do not accept the changes if you want. That would trump their 7 day thing and put the ball back in their court.
Bert
Yes, that would be ok but on balance I would do nothing.Bert
BertBert said:
I'm interested in why you'd suggest doing nothing? Contract changes can have implied acceptance which would be the risk if one did nothing.
You can never be 100% sure of these things but the case below was won by the employer mainly because the employee seemed to have accepted the implied term for 9 years. As I said I would do nothing.bad company said:
BertBert said:
You can simply write back and say you do not accept the changes if you want. That would trump their 7 day thing and put the ball back in their court.
Bert
Yes, that would be ok but on balance I would do nothing.Bert
http://www.wslaw.co.uk/knowledge-centre/newsletter...
As mentioned I would go to the specific contractor forums which are around.
I would also get a QDOS review.
Other perceptive people have picked up on the public-sector changes, which is likely the root cause of this.
Ultimately if you are running a limited, you can choose whether or not to accept the contract. There is quite a lot of hassle dealing with certain agencies/certain large government contract pools. Only you can decide if you want to take that hassle or would find it easier dealing with a private sector firm.
I would also get a QDOS review.
Other perceptive people have picked up on the public-sector changes, which is likely the root cause of this.
Ultimately if you are running a limited, you can choose whether or not to accept the contract. There is quite a lot of hassle dealing with certain agencies/certain large government contract pools. Only you can decide if you want to take that hassle or would find it easier dealing with a private sector firm.
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