What's the view on 'overtime' ?

[ChimpMaster]

Hey all

My client is willing to pay overtime due to the workload that this contract entails, but I'm not sure about the IR35 implications of this.

I am contracted on a daily rate "time & materials" basis - with no core hours specified. It's the standard PCG contract.

Hours normally work out at 40 per week, and I have been told that each hour above this can be charged at 1.5 times hourly rate. For example, if I work 46 hours in a week, I get to charge a whole extra day in that week (6 extra hours * 1.5 = 9 extra hours billable).

Weekends have been offered at double time, though I do not anticipate much need for weekend work.

So this overtime can be quite an earner, but I'm not sure how it will affect my IR35 status, if at all. I should also mention that this "overtime" is not specified in the contract; I simply charge the extra hours on my invoice (no agency involved, I am direct with the client).

This is the first time in years of contracting that I have come across overtime. Of course I am more than happy to earn that bit more, but are there any legal or IR35 implications I need to consider?

[Support Monkey]

Its not overtime, its extra time over and above the agreed timescale for the project, just do the time add the hours up at time and a half and bill them for the extra half/full day.

Or if your that worried just bill them at your normal daily rate

[northernladuk]

You are a contractor, your don't work 'overtime'. You work extra hours for which you can bill as per your T&M contract.

Get them to specify a rate for Sat Sun work. Avoid permie terms like 'double time'.

You could get them to add an extra clause in the contract specifying this extra time at extra rate, get it signed and attach to your original contract would work as well I guess though I am sure emails would suffice.

Make sure you are differentiated from permies in all aspects and then go fill your boots.

[Clare@InTouch]

Agree with the above - an electrician will charge extra for evenings and weekends, doesn't make him your employee.

[BolshieBastard]

Agree with the above - an electrician will charge extra for evenings and weekends, doesn't make him your employee.

Yes, that may well be the case if you ask him to do a job outside his normal day.

The difference is though if you've engaged an electrician to re wire your house and he stays after 5pm a couple of evenings to finish the job, he would not come and ask you for 'overtime,' 'extra time' money or multiples of his normal hourly rate to do the work.

And if he did, I'd tell him to p*ss off and do the work for the agreed rate.

IMO, what the OP is talking about is clearly 'overtime' in permie speak and no matter how you dress it up, this is exactly how HMRC will view it (if they ever investigate).

In the real world though, the chances of HMRC investigating are few. So, the OP has the choice. he either does the 'overtime' at multiple hourly rates, bill at plain time for the extra hours or doesnt work the extra hours.

Of course another alternative is to work the hours for free but who'd do that?

[ChrisPackit]

Don't use the word Overtime again unless you want a barrage of tulipe soming your way!

The way I have done it in the past is I usually work the extra hours into a standard half day or day and then charge 6 days instead of 5. No IR35 implications involved whatsoever then.

[Notascooby]

My contract clearly states that a standard working day is 7.5 hours and anything up to 9 hours and up to 40 hours per week. Time worked above a 40 hour week may be charge at day rate / 7.5 * hours worked.

At a previous contract I had a standard day rate, a call-out charge and a overtime rate that was charged in increments of 0.5 days with a weekend multiplier.

In June I charged 31 days + number of call-outs!

[Boo]

My client is willing to pay overtime due to the workload that this contract entails, but I'm not sure about the IR35 implications of this.

There are no IR35 implications in having different hours paid at different rates. If you are madly paranoid about it then you can avoid the word "overtime" in the contract schedule and just have a table of rates for different days of the week, and times of day.

You will hear a lot of old carp from the agency contingent on these forums about how overtime is for employees but ask any jobbing sparkie or plumber how much they charge for Sunday or bank holiday working...

Boo

[BolshieBastard]

There are no IR35 implications in having different hours paid at different rates. If you are madly paranoid about it then you can avoid the word "overtime" in the contract schedule and just have a table of rates for different days of the week, and times of day.

You will hear a lot of old carp from the agency contingent on these forums about how overtime is for employees but ask any jobbing sparkie or plumber how much they charge for Sunday or bank holiday working...

Boo

Yet another totally incorrect comparison. How many electricians or plumbers do you know have been investigated for IR35? Then, ask yourself why you dont know any.

Answer, HMRC, rightly or wrongly, see them as 'true' self employed people.

[Scrag Meister]

In June I charged 31 days + number of call-outs!

Way to go.