Freelancers' Questions: How to fix contract issue with MedComms client?
Freelancer’s Question: I've just run into an issue with a Medical Communications company that I supply. I have an IR35 compliant contract with them, and work on a wide range of projects for several of their clients. One of their clients recently requested the CVs of all freelancers/contractors who work for the MedComms company (due to privacy issues related to clinical trials), and have now requested that it has to be made clear that the MedComms agency is sub-contracting the work to me (as opposed to my limited company). I'm not sure I have my head around this yet, but what would an expert advise me, at least initially?
Expert’s Answer: Assuming that the written contract is between Medcomms and the contractor’s limited company, I am not sure that you, the freelancer/contractor, can give the client this assurance as the limited company would be the subcontractor in this instance.
If the contract was between Medcomms and you as an individual personally, then IR35 would not be relevant and the agency would be responsible for PAYE etc.
It is often the case in your industry that the client requires the personal service of a named individual because of the nature of clinical trials. This will always be a factor in determining whether or not a limited company contract is within or outside IR35 (simply having a “compliant” contract will not be sufficient to guarantee that the work is outside the scope of IR35), but if the client genuinely requires the individual to be the subcontractor (and not the limited company) then the current arrangements will not be suitable. As a result, the individual would need to be an agency worker with Medcomms. I would try and find out precisely why the client requires this confirmation.
The expert was John Hill, co-founder of IR35 advisory John Hill & Associates.
27th June 2013