Contract without paper - IR35 exposure?

[lilelvis2000]

My contract expired last month - however my client and I have agreed a new rate and that I'll continue working (if I want to) on the same projects I am now. Without a formal contract - is there more IR35 exposure? What about expenses and the two year rule?

[tim123]

how can you agree a rate rise with no formal paperwork?

It isn't just you that needs an audit trail for the taxman, the client needs one too. (and shareholders usually aren't too pleased if money disappears from the company for no obvious reason)

tim

[wc2]

I've worked with no written contract before. - Not sure about the IR35 aspect.

Tim the audit trail is not a problem - Invoices.

[VectraMan]

Yes no need for a contract: invoices/P.O.s.

People have said that they tend to look at your actual working situation more than what it says in the contract, so that might suggest you're no worse off not having a contract. Also not having a contract suggests more of a risk, which is also good from an IR35 point of view.

[tim123]

I've worked with no written contract before. - Not sure about the IR35 aspect.

Tim the audit trail is not a problem - Invoices.

Invices aren't enough. I can raise an invoice to a company for milion pounds.

If they paid it without a contract in place the shareholderes are going to become very suspicious.

tim

[Pondlife]

Invices aren't enough. I can raise an invoice to a company for milion pounds.

If they paid it without a contract in place the shareholderes are going to become very suspicious.

tim

They need to have a PO that will match your invoice. There doesn't 'have' to be a contract in place.

[lilelvis2000]

Invices aren't enough. I can raise an invoice to a company for milion pounds.

If they paid it without a contract in place the shareholderes are going to become very suspicious.

tim

uhhhh...your client would of course have to sign off the invoice to indicate that you did do the work. I work in a company of 10,000+ and my direct client sees and signs my invoices...not some monkey in AP. Have you never heard of a cost centre?

[lilelvis2000]

how can you agree a rate rise with no formal paperwork?

It isn't just you that needs an audit trail for the taxman, the client needs one too. (and shareholders usually aren't too pleased if money disappears from the company for no obvious reason)

tim

Verbal agreement? Like when the plumber comes by to fix the drains...you agree to his rate before the work is done. no paper anywhere to be seen.

I'd rather get paid in cash and avoid the paperwork...wouldn't we all?

[tim123]

uhhhh...your client would of course have to sign off the invoice to indicate that you did do the work. I work in a company of 10,000+ and my direct client sees and signs my invoices...not some monkey in AP. Have you never heard of a cost centre?

Sorry, but the manager signing the invoice is not going to be enough to satisfy the shareholders. In instances of companies wrongly paying money over to third parties, the individual payment was likely to be signed off by manager.

As to the PO answer. I agree. But for my purposes this IS the contract. It will contain the payment terms. But the first post siad that he had no documented proof of the payment terms.

tim

[TheMonkey]

I always do a client-signed "work proposal" with cost and time estimate and file that. It's not a contract, but it covers the intention to provide a service for a cost for a period.