IT Contracting.. opt in or out?

[n3il123]

Hi my contract is coming to an end (after 4 years!!) and have just started applying for new ones and a couple of the ad's have asked if I want to opt in or out... now I'm a little confused as to what this means exactly so haven't progressed these any further (don't want to commit to anything) so could anyone enlighten me to what this means?

Thanks as always in advance

[atom111]

I suspect thats going to relate to IR35 best you google it as it's a mind field then speak to an accountant.

Edited by atom111 on Wednesday 5th December 20:31

[Eric Mc]

Ask THEM what they mean by the term "opt in or opt out".

The Revenue will tell you that IR35 does not involve opting for anything.

[atom111]

The term inside and outside of IR35 is often banded around. But Eric's correct ask them what they mean

[n3il123]

thanks for the replies.. here is the actual text for the question..

"The Conduct of Employment Agencies and Employment Business Regulations 2003 (the Regulations) will apply to all services provided by ourselves, including fixed term contracts for the provision of technical services, unless you are a limited company contractor and exercise your right to opt out of the Regulations. Do you wish to opt out? * Yes No"

[Eric Mc]

Are you working as an aindividual or through your own limited company?

[n3il123]

I am working through my own limited, Vat registered etc

[Eric Mc]

Then IR35 will be an issue.

I can't see how the agency is asking a limited company to opt into ot out of employment terms.

[Route324]

I was a contractor PM for a while around the time IR35 came into being.

If I remember correctly. I think this is to do with the Recruitment agency protecting themselves from you claiming employee status with them should the IR deem you to be caught by IR35.

Therefore it is always better to opt out of any thing that creates a pointer of employment with anyone, agency or client.

Or it was connected to the Working Time Directive and it allows you as a freelance individual to work more hours than the maxmimum allowed by law in a single day/week. Opting in means you agree to have your professional working day hours capped. This might seem like a good thing on the face of it, but the IR will consider this a pointer to employment and therefore a pointer to being caught by IR35 rules.

Now I've written this down, I'm sure it was the latter.

[UpTheIron]

http://forums.contractoruk.com

Do a search first though, we're not so nice to newbies over there.

Opting In / Out is not related to IR35, although some will argue that Opting In could be a pointed to being caught by IR35, especially EA's who would likely prefer you Out rather than In.

http://www.contractoruk.com/news/001591.html

[alanruss]

n3il123 said:

Hi my contract is coming to an end (after 4 years!!) and have just started applying for new ones and a couple of the ad's have asked if I want to opt in or out... now I'm a little confused as to what this means exactly so haven't progressed these any further (don't want to commit to anything) so could anyone enlighten me to what this means?

Thanks as always in advance

It is to do with some new working related regulations that came into being (while I was in recruitment). Its a bit like when you go temping and they ask you to opt out of the Euro 48hr maximum week rubbish. If you ring the agnecy they will give you the standard spiel, but if you are ltd comp contracting I'd opt out. You will get more rights if you opt in like some sort of sickness cover and some other protection, but it does make you look like more of an employee and people prefer to stay the same as they were.

HTH

[E36GUY]

Ltd co contractor = Opt out & stay IR35safe.

Temp employee - opt in

[n3il123]

UpTheIron said:

http://forums.contractoruk.com

Do a search first though, we're not so nice to newbies over there.

Opting In / Out is not related to IR35, although some will argue that Opting In could be a pointed to being caught by IR35, especially EA's who would likely prefer you Out rather than In.

http://www.contractoruk.com/news/001591.html

Thanks I have been a member of that forum for a couple of years... unfortunately the "opt in out" returns no records because the words are too short!!!!

[n3il123]

E36GUY said:

Ltd co contractor = Opt out & stay IR35safe.

Temp employee - opt in

Thanks makes sense!

[Eric Mc]

"Ltd Co - Opt Out stay IR35 safe"

That is not guaranteed by a long chalk. However, it is the best strategy to adopt if you are building up a bank of "IR35 Defences".

[Route324]

Be careful.

Opt out, does not = IR35safe as previously posted. However, it is one less factor for the IR to use against you.

To be IR35safe you need to structure your business as if it was a real business.

IIRC. Some of the most significant factors are:
a) how much direction and control does your client have over how you perform the work?
b) is there any financial risk involved? and not just the outstanding invoice amounts. Is the work on a fixed price - finish early and your quids in, hit problems and you've realised one of the risks of fixed price.
c) are you able to work for other clients?
etc
etc
etc