IR56
Is it possible to obtain an ‘IR35 proof’ contract?
It is likely that there will be a number of ‘standardised’ contracts in existence or will come into existence that will clearly fall in or outside of IR35. It is also likely that many will spend time trying to word contracts to achieve a certain end. There are already a number of contracts on the market which claim to be ‘IR35 proof’. However, wording is not everything – the intention of the parties is paramount and the contract must reflect the actuality of the arrangements. In extreme cases, if the contract does not reflect the commercial reality of the individual's circumstances, HM Revenue and Customs may perceive this as tax evasion. If you are unsure then using a PAYE umbrella company is the safest option for you.
How will HMRC view ‘standard’ contracts?
Standard agency contracts are quite common in the IT industry. HM Revenue & Customs view is that where there is an engagement of more than a month on terms that specify a set number of hours per week on the client/end users premises for an agreed hourly rate; and the worker is under the control of the client’s staff then this is likely to be classified as employment. In which case your contract would fail the test for self employment and your safest contracting option would be to utilise the services of a PAYE umbrella company.