PCG issues version 5 draft contracts after judicial review comments

In this issue:

• New PCG draft contracts
• PCG fringe meeting at Labour conference
• Analysis of latest IR FAQs
• Client Briefing Document
• PCG AGM & Conference

New PCG draft contracts

From early morning, Monday 24th September new versions of PCG draft contracts will be available.

The first PCG sample contracts were issued in March 2000 and provided guidance as to the form and content of a typical "business to business" contract for services – i.e. contracts that would place their users outside of IR35 - provided the contracts reflected the reality of the relationship.

Draft agreements were published to cover both the situation where the contractor’s company worked direct to the end client, as well as the more common situation where the contractor’s company has a contract with an agency, which in turn has another contract with the end client.

In light of comments made by the judge at the judicial review, the contracts have been reviewed and updated. A number of suggested approaches were considered including the use of framework agreements. However, it was decided to use the existing drafts as the basis for revised contracts as these are now familiar in the market place.

Anne Redston, partner at Ernst & Young, has reviewed the new PCG model contracts and confirmed that:

"These contacts reflect the current case law which determines whether someone is inside or outside IR35.

Where the 'direct' contract, between the client and the supplier, is put in place and it accurately reflects the relationship between the client and the worker, then, based on current case law, the contractor will not be caught by IR35.

Similarly, where the 'back-to-back' contracts between the client, the agent and the supplier are put in place, and they accurately reflect the relationship between the client, and the worker, then based on current case law, the contractor will not be caught by IR35."

It is a great result for PCG to obtain such a clear view from Anne, who is well known in the accountancy world, where her opinion is greatly respected by all – including the IR. The latest version 5 contracts are available from PCG

PCG fringe meeting at Labour conference

PCG is running a fringe meeting at the Labour party conference in Brighton on Wednesday 3rd October from 6pm.

All members are urged to write to their MPs to invite them to attend - and members themselves are very welcome. The meeting will address “The Case for Freelancers, Small Business and the Self-employed” and guest speakers include Tony McWalter (Labour MP for Hemel Hempstead) and Nigel Lockett of Lancaster University Management School. Andy White will speak for PCG.

Analysis of latest IR FAQs

A full commentary and analysis from PCG of the recently published Inland Revenue FAQs on IR35 is available. The analysis from Kevin Miller explains the latest information – and how members should use this.

Client Briefing Document

PCG is gaining some early success and positive feedback from clients who have seen our client briefing document.

PCG AGM & Conference

Be sure to check out the excellent programme for the York conference. The conference offers an excellent opportunity to not only meet fellow members, but many of the PCG legal, accounting and tax advisors will be in attendance, as well as the Directors. This week we have added further information on travel – eg York is just 2 hours and £38 from Kings Cross - As well as info on local tourist attractions and hotels if you are bringing family.

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PCG Press