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Contracting Newbie Seeking Agreement Input From Experienced Contractor

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    Contracting Newbie Seeking Agreement Input From Experienced Contractor

    Background:

    I'm a IT Consultant in London and have decided to leave my current position to move elsewhere (geographically). However I've got one outstanding project with my current employer that I think will look great on my CV and they want me to keep on doing - so we've negotiated rates for me to come back as an external contractor. I've attached a copy of the contractor agreement they would like me to sign (please forgive crude "anonymizing").


    Actual Questions:

    1. Could any experienced contractors let me know if there are any glaring issues in the contractor agreement below?

    2. Also, any comments on this agreement's likely IR35 status would be much appreciated. (If at all relevant, I incorporated the company 2+ years ago to sell iPhone applications through, and am now adding this to its functions too).

    3. Do I really need the two insurances mentioned: public & professional liability insurance?



    #2
    Originally posted by ycoder View Post
    Background:

    I'm a IT Consultant in London and have decided to leave my current position to move elsewhere (geographically). However I've got one outstanding project with my current employer that I think will look great on my CV and they want me to keep on doing - so we've negotiated rates for me to come back as an external contractor. I've attached a copy of the contractor agreement they would like me to sign (please forgive crude "anonymizing").


    Actual Questions:

    1. Could any experienced contractors let me know if there are any glaring issues in the contractor agreement below?

    2. Also, any comments on this agreement's likely IR35 status would be much appreciated. (If at all relevant, I incorporated the company 2+ years ago to sell iPhone applications through, and am now adding this to its functions too).

    3. Do I really need the two insurances mentioned: public & professional liability insurance?


    We would recommend to always have a professional review of your contract, nothing wrong with advise in the forum but it would count as acting diligently if ever there were an IR35 investigation.

    As far as insurance, you need to purchase the required insurance as per the contract terms as they will most likely ask for proof. Some require just professional indemnity, others employer's and public liability also.
    http://www.linkedin.com/in/sallyfletcher

    Comment


      #3
      Originally posted by Sally@InTouch View Post
      We would recommend to always have a professional review of your contract, nothing wrong with advise in the forum but it would count as acting diligently if ever there were an IR35 investigation.

      As far as insurance, you need to purchase the required insurance as per the contract terms as they will most likely ask for proof. Some require just professional indemnity, others employer's and public liability also.
      WSS.

      We Are Not Contract Specialists.

      And insurance is a normal requirement these days.
      "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
      - Voltaire/Benjamin Franklin/Anne Frank...

      Comment


        #4
        Regarding IR35 I would say your status is precarious at best. One of the most obvious indicators to being inside IR35 is contracting for a previous employer, especially straight after your period of employment, as it can easily be argued that you are simply doing the same work as when employed but through a LTD company purely as a vehicle for tax evasion - i.e. you're a disguised permie.

        The only way out of this is if your working conditions are significantly different than when you were an employee, which might include:

        - Different physical location.
        - Different working hours.
        - Different reporting lines / line manager.
        - Flexibility in working from home or from another location.
        - Doing a substantially different job.
        - Working on a different project.

        From your post it sounds like you're going to be carrying on with an existing project, which makes me doubt any of the above will apply and therefore it's pretty much guaranteed that you'll be inside IR35. This isn't necessarily a problem so long as you aware of it, and simply means you must pay yourself 95% of your invoice total as a salary (which means paying the relevant PAYE and NI), with up to the remaining 5% allowable for expenses.

        This means you need to work out whether the agreed daily rate will provide you with sufficient income once tax and NI has been taken into account, plus your actual expenses such as travel (which I see from the agreement they are not covering, so it comes out of your pocket).

        Worst case you may need to re-negotiate the rate otherwise you could end up worse off than when you were a permie.

        Comment


          #5
          Originally posted by cojak View Post
          WSS.

          We Are Not Contract Specialists.
          Excellent acronym potential there.

          Comment


            #6
            Originally posted by Just1morethen View Post
            Excellent acronym potential there.
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            ContractorUK Best Forum Advisor 2015

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