No Notice Period from Client, I can't give notice!

[ChimpMaster]

Mr. Dwainpipe the OP with 1 post comes on here to educate us with FUD.

I've used IPSE contract templates for my direct-to-client work and the terms include 0 day notice from the client and the contractor being unable to give notice. This has always been a pointer to being out of 'employment' and hence out of IR35.

[NotAllThere]

Mr. Dwainpipe the OP with 1 post comes on here to educate us with FUD.

Join date: 25th April 2013... But I've done a few other checks and looks like a genuine person.

[Dwainpipe]

I sure am a genuine person and I'm not here to lecture others. I wonder what others thought.

To clarify, the client not having to give notice is the IR35 red flag, not the contractor not being able to give notice (that is just unfortunate).

I also read the article confused initially. It would appear that the chap in question lost the first case and when reading the judgement a significant factor was that the client didn't have to give notice, so the contractor was seen as causal labour. Then the contractor appealed the judgement and won... many other factors were reviewed and the judgement was made in favour of the contractor, i.e. outside of IR35.

Again to answer some of the comments, my accountant and IPSE's IR35 advice line (run by AbbeyTax I believe) agreed that the client notice period is the problem that would have a significant negative impact if I would have to prove to be outside IR35. Of course I'm sure many people / limited companies would be fine with taking this risk and fighting any case that may come about, however I don't run my business that way so I've declined the contract.

So are we collectively saying this kind of notice periods (none from the client and unable to give notice from the contractor) is a normal thing?

I get it shows very nicely that we are not employees but what business would accept a contract with no get out clause... it seems quite poor business judgement to me as take it to the worse position (like we should with all contracts) and we could be liable for the value of the contract for the remaining contract period if we were to default on the contract. An unlikely situation but it could happen, the same as the taxman could come knocking... it could happen.

[SueEllen]

I sure am a genuine person and I'm not here to lecture others. I wonder what others thought.

To clarify, the client not having to give notice is the IR35 red flag, not the contractor not being able to give notice (that is just unfortunate).

I also read the article confused initially. It would appear that the chap in question lost the first case and when reading the judgement a significant factor was that the client didn't have to give notice, so the contractor was seen as causal labour. Then the contractor appealed the judgement and won... many other factors were reviewed and the judgement was made in favour of the contractor, i.e. outside of IR35.

Again to answer some of the comments, my accountant and IPSE's IR35 advice line (run by AbbeyTax I believe) agreed that the client notice period is the problem that would have a significant negative impact if I would have to prove to be outside IR35. Of course I'm sure many people / limited companies would be fine with taking this risk and fighting any case that may come about, however I don't run my business that way so I've declined the contract.

So are we collectively saying this kind of notice periods (none from the client and unable to give notice from the contractor) is a normal thing?

Yes.

IR35 depends on more in the contract than not being able to give notice on the side of the company providing the services.

I get it shows very nicely that we are not employees but what business would accept a contract with no get out clause... it seems quite poor business judgement to me as take it to the worse position (like we should with all contracts) and we could be liable for the value of the contract for the remaining contract period if we were to default on the contract. An unlikely situation but it could happen, the same as the taxman could come knocking... it could happen.

The reason people have been calling you out as your post seems nonsense.

Hence my initial though is there is information you are not telling us about the contract. For example is the contract open ended?

[ChimpMaster]

Yes.

IR35 depends on more in the contract than not being able to give notice on the side of the company providing the services.

The reason people have been calling you out as your post seems nonsense.

Hence my initial though is there is information you are not telling us about the contract. For example is the contract open ended?

But also as I've always known it, the fact that you can't give notice implies that you are tied into the contract until completion. IPSE's advice is that this is a pointer outside of IR35.

[adubya]

For years, loads of the contractors @ IBM were in such a position. They couldn't give notice and were expected to fulfil the contract term.

Still the case I believe.

[Scruff]

For years, loads of the contractors @ IBM were in such a position. They couldn't give notice and were expected to fulfil the contract term.

Still the case I believe.

True. I've been able to negotiate an "out" on two occasions, however.

[Dwainpipe]

It's a 12 month contract and very normal in all other senses. It's just the notice period that is strange and unacceptable to me.

IBM still have those terms (I turned them doing too)

I can see that the contractor not being able to give notice is an outside IR35 sign, but makes poor business sense.

It's the client giving no notice that's the red flag. The client doesn't care as there is no risk to them.

[northernladuk]

It's becoming more and more popular. Barclays imposed the same quite a few years ago when people kept leaving them but then they did have a habit of cutting rates and heads so kind of their own daily.

IMO it's not a deal breaker. There is always the option to negotiate your way our and a client can effectively walk you on the spot whatever notice they've go. They just withdraw the work and you don't get paid another penny. Same as instant termination so don't think notice periods on their side mean anything.

[SlipTheJab]

It's becoming more and more popular. Barclays imposed the same quite a few years ago when people kept leaving them but then they did have a habit of cutting rates and heads so kind of their own daily.

IMO it's not a deal breaker. There is always the option to negotiate your way our and a client can effectively walk you on the spot whatever notice they've go. They just withdraw the work and you don't get paid another penny. Same as instant termination so don't think notice periods on their side mean anything.

Most clients will tend to honour a notice period though even if there is no legal requirement for them to do so, and expect you to do the same. I've never bailed early on a contract so far, my option is that if you've signed up to X months then you have an obligation to do X months (unless something changes like a rate cut mid contract).