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How often has your purchase of goods or services been influenced by a ‘guarantee’? Increasingly guarantees are at the heart of many transactions; ‘money back guarantee’, ‘satisfaction guaranteed’, ‘5-year parts and labour guarantee’ and so on. Many of us draw some comfort from these terms, whilst always remaining a little sceptical of what really stands behind it.
At IF Contracting, we offer a unique guarantee on the rate of return to contractors, ensuring that no contractor will ever have to pay more tax or social security than originally quoted. In the highly unlikely event that we get your original quote wrong, IF Contracting will settle the shortfall directly.
Fine words, I hear you cry, but how does this play out in practice and have we ever had to use it? Well, let’s take a closer look at how this works.
How is this Guarantee put in place?
When IF Contracting (IFC) is selected by a you, the freelancer, about to commence a contract abroad, we will agree on a Projection of Earnings (PoE), which sets out your – net take-home pay based on your day-rate, tax-allowable expenses and other relevant factors. Once this PoE has been agreed, IFC will guarantee that level or earning for the duration of your contract. In effect we guarantee that you will have no additional tax burden when your contract ends.
Does the guarantee actually mean anything?
At the end of your contract your final tax position will be assessed by the in-country tax authorities. Regardless of the final assessment, our guarantee assures you that you will have no additional tax bill. On the other hand, if the final assessment results in a tax rebate, then this is passed straight back to you, the worker. So, you will never have an unexpected tax bill and there is only ever an upside.
Has the guarantee ever been called upon?
In short, yes. IFC has, on a number of occasions, had to pay the balance between the tax withheld from gross fees and the tax indicated in the final demand. Equally, in a number of instances we have been in a position to pass tax rebates back to our client workers.
Why does IFC offer the guarantee?
IF Contracting believe that if you put yourself forward as a Global tax and payroll service provider then you should be held accountable for your services. IF Contracting were the first company to be bold enough to adopt this strategy, 5 years ago, and it has remained throughout our growth into over 20 countries. We don’t just ask contractors to trust in our knowledge and expertise, we back that up by providing the guarantee that gives you total peace of mind and absolute certainty.
Perhaps a more interesting question is How can IFC afford to give this guarantee? Well, our experience has proven that our PoE’s, time and time again, are 99% accurate. We achieve this by only working with top level in-country partners and maintaining great, open relationships with them. We discuss all possible scenarios with them to ensure no single PoE is the same as another, with each one being bespoke to the individual contractor. We know which tax laws are relevant and how they are applied, especially those relating to tax allowable expenses.
Aha! Do ‘terms and conditions’ apply?
Just one, our PoE is based on information provided by the freelance worker at the outset of the project. Our only T&C is that this information is correct for the obvious reason that we can only provide a PoE based on accurate information. As long as this information is correct, our guarantee stands. It defines who we are and we are proud to say that it has been called upon on numerous occasions, and paid with a heart and a half!