Last week I started a new contract with a new client, and after having a thorough review via a 3rd party the contract was water-tight with respect to IR35.
The contract between my limited and the client specifies the projects the consultant (me) will be assigned to. During the interview the situation was explained to me that there would be a roughly 80 / 20 split or thereabouts between the two projects. No problem I thought.
On the first day I find out that the client has changed the goal posts and now the secondary project is number 3 in a list of 4 they want me to work on at some point. And they wanted to initially dictate a 50/50 split between my time on the major project and a selection of the 4 secondary projects.
Curve ball.
Now I'm not particularly happy about this obviously, but from my point of view looking strictly at the working practices and avoiding being controlled by the client, something needs to change. The worst case is a tax bill in the future my wife and I can't pay.
So the question is how to shore this up. I've very diplomatically said let's get our feet under the table on the first project, find out what it looks like, and then take a step back to see how other projects can be woven in - and we have agreed this will happen in early June. So until then my limited will be working on the primary project only, and I believe the contract is sound.
Encouragingly, since I made this recommendation (as the consultant), the client has started downplaying any idea of a 50/50 split in time.
So the question is how to shore this situation up.
In my mind, if the client wants to reshape the projects configuration, this should be done at a contract level so as to not jeopardise the IR35 status and risk leaving me (as director of my limited) with an unexpected tax surprise in the future. That's simply not a risk worth taking, and I'm sure that can be explained in a diplomatic and matter of fact way, business to business.
This is my first draft of ideas to resolve. Any thoughts?
The contract between my limited and the client specifies the projects the consultant (me) will be assigned to. During the interview the situation was explained to me that there would be a roughly 80 / 20 split or thereabouts between the two projects. No problem I thought.
On the first day I find out that the client has changed the goal posts and now the secondary project is number 3 in a list of 4 they want me to work on at some point. And they wanted to initially dictate a 50/50 split between my time on the major project and a selection of the 4 secondary projects.
Curve ball.
Now I'm not particularly happy about this obviously, but from my point of view looking strictly at the working practices and avoiding being controlled by the client, something needs to change. The worst case is a tax bill in the future my wife and I can't pay.
So the question is how to shore this up. I've very diplomatically said let's get our feet under the table on the first project, find out what it looks like, and then take a step back to see how other projects can be woven in - and we have agreed this will happen in early June. So until then my limited will be working on the primary project only, and I believe the contract is sound.
Encouragingly, since I made this recommendation (as the consultant), the client has started downplaying any idea of a 50/50 split in time.
So the question is how to shore this situation up.
In my mind, if the client wants to reshape the projects configuration, this should be done at a contract level so as to not jeopardise the IR35 status and risk leaving me (as director of my limited) with an unexpected tax surprise in the future. That's simply not a risk worth taking, and I'm sure that can be explained in a diplomatic and matter of fact way, business to business.
This is my first draft of ideas to resolve. Any thoughts?
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