Renewal - rolling or dated contract?

[ContractorBanking]

Got a renewal on the table (been here 1 year) - have the option of:

1) a dated contract - 12 months with a 1 month notice period from either party
2) rolling contract with the same a 1 month notice period from either party (no end date on contract)

And I’m thinking of asking for a hybrid of the above:
3) 12 month contract. If at the end of that 12 month period, no party has served notice, the contract will continue on a 1-month rolling contract until either party calls an end to the contract

Any IR35 effect on either of the above points or from a financial perspective? Only thing I can think of is travel & subsistence – is this still claimable on option 2)

Contract, client and work all fits the bill and I’m still enjoying it here. Option 3) is enticing as it saves having to ask for renewals, so can quite easily end up as a long term contract.

Thoughts?

[northernladuk]

Rolling contracts are very bad for IR35. Google will find out why for you.

The work you are doing? I assume it's just BAU work seems you don't need schedules of work?

Sounds to me like you are just being lazy with the paperwork which is what happened to LJL which lost him his IR35 case.

[pr1]

Got a renewal on the table (been here 1 year) - have the option of:

1) a dated contract - 12 months with a 1 month notice period from either party
2) rolling contract with the same a 1 month notice period from either party (no end date on contract)

And I’m thinking of asking for a hybrid of the above:
3) 12 month contract. If at the end of that 12 month period, no party has served notice, the contract will continue on a 1-month rolling contract until either party calls an end to the contract

Any IR35 effect on either of the above points or from a financial perspective? Only thing I can think of is travel & subsistence – is this still claimable on option 2)

Contract, client and work all fits the bill and I’m still enjoying it here. Option 3) is enticing as it saves having to ask for renewals, so can quite easily end up as a long term contract.

Thoughts?

if you've already been there a year and sign a 12 month contract you're saying goodbye to 12 months worth of tax-deductable expenses - something to bear in mind!

[Lance]

if you've already been there a year and sign a 12 month contract you're saying goodbye to 12 months worth of tax-deductable expenses - something to bear in mind!

depends on the exact dates.
If your first stint started on 3rd Nov 2015, make sure then date is 2nd Nov 2017 (or earlier)


Oh. And what NLUK said. A rolling contract is bad idea.

[ContractorBanking]

Noted on the 2 year rule. The 12 month extension I intend to make a 51-week extension, so falling within the 2-year T&S.

Let me read more on the rolling contract issue..

[northernladuk]

Noted on the 2 year rule. The 12 month extension I intend to make a 51-week extension, so falling within the 2-year T&S.

Let me read more on the rolling contract issue..

Let me help you with that.

IR35 Case | IT contractor left with huge bill for unpaid taxes.

Control - Spencer changed from being on a series of different contracts for specific projects to having a rolling one year contract that was extended repeatedly over four years. During this period the client could ask him to work on any tasks, rather than have him undertake specific projects. This change in control was considered 'breaking the link with projects, and indicating that Mr. Spencer would work generally within the organization' and therefore placed him inside IR35 from 2003.

Reason 3: Mutuality of Obligation

The client expects further work from you after the current contract. With regular work and “rolling Contracts” the Revenue will argue that you are an employee of the client. More on the mutuality of Obligation.

http://www.contractoruk.com/ir35/

Problems may arise if, for example, an end client cannot issue terminate a contract for services immediately, but instead has to provide notice. Again, if a contractor has a ‘rolling’ contract with a client, rather than a fixed length contract, this could also indicate that a mutuality of obligation exists at the end of the initial contract period.

http://www.malikshaw.com/docs/IR35-i...ontractors.pdf

Mutuality of Obligation - In the event the client and/or the Agency involved is obliged to offer continued work then this would also place you within IR35. All contracts should have a non mutual obligation clause to ensure that neither party are expected or contracted to offer or accept future work (after the initial project has expired). This does not preclude either party agreeing new terms under a further contract but it would be unwise to have a rolling contract for services.

Many of the articles also mention part and parcel and the lack of defined deliverables. I'm not a fan of 1 year contracts because it's difficult to write an accurate schedule of work and stick to it for that period. It's very tempting to offer you a new project or piece of work in that time in which case you are stuffed as well. In most cases the schedule will just look like a job description so it's not just the rolling contract problem you are facing.

[ContractorBanking]

Thanks NLUK, appreciate the summary and links.





Many of the articles also mention part and parcel and the lack of defined deliverables. I'm not a fan of 1 year contracts because it's difficult to write an accurate schedule of work and stick to it for that period. It's very tempting to offer you a new project or piece of work in that time in which case you are stuffed as well. In most cases the schedule will just look like a job description so it's not just the rolling contract problem you are facing.[/QUOTE]

[LondonManc]

Take yourself up to 1 yr 51 weeks. If you get offered another extension, figure out what would keep you - you know what your expenses are (and I'm not talking about food, etc., I'm talking about the bigger stuff here like significant travel and accommodation).