weekly timesheets and IR35

[hgllgh]

My agency is pressing me for weekly timesheets.


If I am invoicing weekly might it affect my IR35 standing with HMRC?
Weekly payment is closer to how an employee is paid.

I am guessing one of the ways promote non-IR35 status is to delay invoicing based on the cash flow of my client. (Satisfies the financial risk test?)
(I know they are actively chasing significant payments which is affecting their cashflow)
Simply issuing weekly timesheets and invoices may compromise my IR35 status ?

[Lewis]

I invoice weekly and it's great. Reduces my risks significantly (e.g. agency going bust). There are no IR35 issues that I am aware of. You should count yourself lucky.

[Denny]

My agency is pressing me for weekly timesheets.


If I am invoicing weekly might it affect my IR35 standing with HMRC?
Weekly payment is closer to how an employee is paid.

I am guessing one of the ways promote non-IR35 status is to delay invoicing based on the cash flow of my client. (Satisfies the financial risk test?)
(I know they are actively chasing significant payments which is affecting their cashflow)
Simply issuing weekly timesheets and invoices may compromise my IR35 status ?

Nearly all EBs insist on paying contractors on a regular payment cycle, either weekly, fortnightly and, more commonly these days, monthly in arrears. Therefore, it is not necessarily your call when you will be paid and changes are not normally open to negotiation. Your contract terms should already state when payments to your limited are due and you've agreed and signed the terms.

Even if you were to talk to your EB and suggest stagnated invoice submissions based on deliverables achieved, the timesheet system effectively negates the ir35 friendliness of such an arrangement - that is more commonly done with direct client work, usually on a fixed payment basis for work satisfactorily performed.

The good news is that the timesheet and regular invoice payment arrangement the EBs insist on will not significantly affect your status provided that you can demonstrate that your terms are a 'for services' contract rather than an 'of service' contract, the upper contract between EB and client mirror those terms exactly, your company name is on both contracts (rather that you being named personally as the provider of the service exclusively), that the terms specifically state that there is no MOO, you have rights of subsitution that is not a sham if put into effect and there is a limited amount if not any client direction and control, if that is not paramount to you being able to do the job in the first place.

If these are firmly in place and you are generally behaving like a proper freelancer and not a 'bum on seat' temp on site during regular hours and on regular days (normally weekdays) which should never be stipulated on the EB workschedule unless there are rock solid reasons for doing this because the job just can't be performed on your own time in your own way. If that is the case, then the timesheet and invoicing issue that concerns you will have little impact. Some EBs are even insisting on self billing now (they raise your company's invoice with VAT instead of you doing it) which is another development within recruitment that scares some contractors in relation to ir35. But even that arrangment doesn't affect ir35 status....... apparently.

Again, like all ir35 related issues, the whole picture is what counts when it comes to HMRC wins and losses on ir35 cases - how the engagement is in practice, on paper, how you run your business, how you market your business. It is not a checklist situation at all, as some commonly believe. Best have some insurance in place just for added protection though. But don't, whatever you do, think that the insurance will remove the responsibilities and onus you have on ensuring the engagement is properly conducted as I have just described though.

Unfortunately, there are far too many contractors still who think that having insurance alone lets them off the hook and that they can merrily go their way acting like bum on seaters and all will be OK - after all ir35 is dead and quoting the footie results of wins and losses the PCG have fought etc. This may be true, but it is just as likely that it is a risk that simply isn't worth taking.

[Bluebird]

It's a good point you make about the insurance Denny.

Although it may cover you, it will not reimburse you for all the hassle you will have to go through should you be subject to an investiagtion.

If you've done everything by the book, it gives you more confidence that the amount of time you'll require to spend on any investigation is mimimal...

[NotAllThere]

...
Weekly payment is closer to how an employee is paid....

Rubbish.

Except when I was a trolley collector for Presto's supermarket, I've never been paid weekly as an employee of anyone.

[sli_gryn]

Rubbish.

Except when I was a trolley collector for Presto's supermarket, I've never been paid weekly as an employee of anyone.

ditto! (except for the trolley collector part...)

i would've thought getting paid monthly would've made you closer to an employee than weekly

[VectraMan]

Weekly payment is closer to how an employee is paid.

Do you pay yourself everytime the company receives money? Maybe that'd be a very small pointer to IR35 if you did, and maybe if like me the company invoices weekly but pays me monthly regardless of where the weeks fall, that helps with the real business defence.

But probably not.

[Qdos Contractor]

The effort of worrying about or changing something like this is a waste of time. There are far larger issues to be concerned about and, providing you break the trinity of substitution, control and MOO, you should be ok.