Contract renewal question

[northernladuk]

Someone remind me why a client would want you to own the company 100%?

For the same reasons given when you asked last time.

http://forums.contractoruk.com/busin...ml#post2067876

None of their business how I structure my company. I'd get that out for a start. Maybe tell them you'll sign if the MD only wears red socks to work every day.

Not quite true. Companies spend a lot of time assessing and monitoring suppliers, particularly when entering in to a new agreement. They will have to go through a risk and compliance check and this may include looking at the company structure to make sure there isn't anything amiss so your set up might be some of their business. Applying that assessment incorrectly and stipulating unreasonable conditions is a different issue.

20% cut, and fannying about with the contract. hmmm. I'd have to be desperate to stay there....

They'd have to be desperate if they had to ask you to.

[mattfx]

OP - sounds like the first clause they want to add in pretty much removes your clause for rights to substitute, which as I understand it is a pretty major factor when determining IR35. That combined with the fact you've been there for years already would probably land you in hot water if you were ever to be investigated.

I understand your situation is a complex one; but if it were me i'd explain to your client about IR35, explain that the proposed changes put you within scope and as such, you cannot accept the pay cut. Or, tell them you'll accept the pay cut but not make the ammendments to the contract. That'd be my play.

[jamesbrown]

FWIW, I wouldn't move on the first issue under any circumstances, because it calls into question the previous relationship over several years, especially if the contract has changed, and you now accept being inside IR35, without a material change in working practices (and even then). It's asking for trouble. You want a contract that reflects reality, and that reality is outside IR35, as currently claimed.

[northernladuk]

FWIW, I wouldn't move on the first issue under any circumstances, because it calls into question the previous relationship over several years, especially if the contract has changed, and you now accept being inside IR35, without a material change in working practices (and even then). It's asking for trouble. You want a contract that reflects reality, and that reality is outside IR35, as currently claimed.

Absolutely and even if you don't move on the contract if this is their intention you can easily argue the working practices are inside regardless of not moving on the wording. Whatever he does now you can't a get away from the fact this is now a real risk.

Chimp has a grasp on whether or not the cut is worth taking but I'd be inclined to start thinking about moving on from this one just from the IR35 perspective. He'll have to just make a decision based on what he knows and balance the risk.

[ChimpMaster]

Thanks guys.

This is a tough negotiation. But it always is when you want to create a win/win and to be happy with the outcome.

So after this morning's meeting with the board:

1. Rate cut reduced to 12.5%. Took some pushing. Not great but not as bad as it might have been.
2. 12 month contract.
3. 60% WFH as a minimum.
4. 100% share ownership removed.
5. "Individual" clause being reviewed by legal team.

I told him I would not sign until the "Individual" clause was removed. He seems to understand IR35 so let's hope the legal team see fit.

[northernladuk]

Just make absolutely sure it isn't all lipservice and the work conditions are exactly as they originally intended. I'd be looking to get a confirmation of arrangements letter signed now you know the sub clause is a sham.

[mattfx]

Any news on this OP? Did the legal beagles come back to you?

[ChimpMaster]

Any news on this OP? Did the legal beagles come back to you?

Mostly as per my last post above so it was going OK, even though I had to take the 12.5% hit. But then Legal starting messing around with the Substitution clauses and then sneaked in terminology about taking instructions from the client (which I never do, because no one knows what I do except that the job gets done and systems keep running and business gets done).

Can you believe Legal even took out the MOO clause ... which means that the client would need to continue paying me even if there wasn't any work for me to do.

Red flags big time!

So it's back over the fence. Frustrating due to time constraints and what with Sept/Oct being the busiest time in my personal life.

[northernladuk]

Mostly as per my last post above so it was going OK, even though I had to take the 12.5% hit. But then Legal starting messing around with the Substitution clauses and then sneaked in terminology about taking instructions from the client (which I never do, because no one knows what I do except that the job gets done and systems keep running and business gets done).

Can you believe Legal even took out the MOO clause ... which means that the client would need to continue paying me even if there wasn't any work for me to do.

Red flags big time!

So it's back over the fence. Frustrating due to time constraints and what with Sept/Oct being the busiest time in my personal life.

OK. So there were red flags about their intentions before but after that? Not a chance you are outside anymore and no amount of contract tennis is going to change the fact. I highly doubt the client will play ball in an investigation looking at that carry on either.
Easy for me to say at this side of the screen but unless they gave me a 20% increase to go inside I'd be done with this one now.

[ChimpMaster]

OK. So there were red flags about their intentions before but after that? Not a chance you are outside anymore and no amount of contract tennis is going to change the fact. I highly doubt the client will play ball in an investigation looking at that carry on either.
Easy for me to say at this side of the screen but unless they gave me a 20% increase to go inside I'd be done with this one now.

No it's a lot simpler than that. Legal jobs at client co have moved from UK to near-shore, so they are trying to put their stamp on things. I feel they have a weak understanding of IR35, which is apparent from their contract terms. So I'm educating them on this subject.

Legal have no idea of my working conditions because they haven't even been to the client office in England, nor to my main place of work (my home/Ltd address).

It's still the IPSE contract and they're trying to amend it but I am reversing their changes.

I'm definitely outside of IR35, regardless of contract terms, because my working practises are so different and non-employee-like that they actually really p1ss off the client management and employees. They know little of what I do each hour/day except that things get done. It really is like that.