A standard contract has been made available to help IT contractors to avoid IR35, the legislation introduced by the British Government to remove what it saw as a loophole for contractors to trade as limited companies to avoid tax and National Insurance Contributions, in circumstances where the individual worker would otherwise be an employee of the client for whom they work.

The joint standard contract was agreed between the Professional Contractors Group (PCG), an organisation originally formed in 1999 to lobby against IR35, and the Association of Technology Staffing Companies (ATSCo), the body representing agencies that supply IT freelancers.

The contract is available for use by PCG members working through ATSCo agencies and, according to the PCG, "has been described by legal experts as a robust defence against IR35".

The first such contract was signed this week, by freelancer Neil A Violet, working through The Wreay Group, a PCG Affiliate member whose managing director, Derek Wreay, also serves on the ATSCo executive.

PCG director Ian Durrant said:

"We are delighted to have reached agreement with ATSCo on the terms of a standard contract. This shows our willingness to work together and demonstrates the increase in understanding that has been achieved between the two groups. Since agencies and contractors 'share the same rice bowl', this has to be a positive step for all parties concerned. We sincerely hope ATSCO members take up the option of using this contract with their PCG member contractors."

The PCG says it intends to devote considerable effort during the coming months to drive client demand for this new industry standard contract.

For more information, see: www.pcg.org.uk and www.atsco.org

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