No contract end date?

[northernladuk]

Not if it’s reasonably expected to finish before 24 months arrives. Although if you work on that basis and exceed 24 months that could be awkward.

How can you reasonably expect anything when there is no end date? If there is no date then surely the only expectation you can make is it will breach it?

[Lance]

How can you reasonably expect anything when there is no end date? If there is no date then surely the only expectation you can make is it will breach it?

How so?

What if I have a contract to deliver an email server, configure for 50 users and train the local staff on support. Paid £10,000 on completion.
No end date for delivery.
How can that be considered to be likely to exceed 24 months? If it did then yes, there’s a problem.

[northernladuk]

He isn't paid a lump sum on delivery. He's on an endless daily rate.

[Lance]

He isn't paid a lump sum on delivery. He's on an endless daily rate.

Change my scenario to T&M rather than fixed price, and it still works.

My point being that an open-ended contract is not in itself going to fall foul. As for the OP, if he walks out at 23 months and 30 days then he's fine anyway. Right?

Pedantry aside. I wouldn't accept a contract like that.
And it doesn't change the fact that OP is probably a permietractor anyway. Certainly the client thinks he is and that's half the argument signed and sealed.

[WordIsBond]

My point being that an open-ended contract is not in itself going to fall foul. As for the OP, if he walks out at 23 months and 30 days then he's fine anyway. Right?

Yes, unless he's left a paper trail that indicated he expected to stay longer.

If he stays past 24 months, the contract could and probably would be used against him to argue he never should have claimed expenses.

It's a thin basis on which to label someone permietractor, though. He's only been there five months. Perhaps the client got fed up with the hassle of getting extensions approved and just wants the contract to run until the project is done.

[Lance]

Yes, unless he's left a paper trail that indicated he expected to stay longer.

If he stays past 24 months, the contract could and probably would be used against him to argue he never should have claimed expenses.

It's a thin basis on which to label someone permietractor, though. He's only been there five months. Perhaps the client got fed up with the hassle of getting extensions approved and just wants the contract to run until the project is done.

Indeed.
It does make it more difficult if, once the project is finished and there's another project to do, which you want to do; as they may not want the hassle of issuing an updated schedule. If that's the case then you are becoming part and parcel.

I think the upshot of the thread is that an open-ended contract is neither an IR35, nor a 24-month rule, problem in it's own right...... but it does require more vigilance in the other areas.

[northernladuk]

I think the upshot of the thread is that an open-ended contract is neither an IR35, nor a 24-month rule, problem in it's own right...... but it does require more vigilance in the other areas.

I don't quite agree with that wording. If you had said the upshot is this alone does not affect the IR35 status but is a risk and the 24 month status is unknown would be better. The way you worded it reads to me they are OK and they are not. I think they are both problems in their own right, not failures maybe but problems.

The only safe option is to not allow this to happen and negotiate out of the situation.

[northernladyuk]

How can you reasonably expect anything when there is no end date? If there is no date then surely the only expectation you can make is it will breach it?

You may be working to a set of deliverables and a plan with an end date at <24 months. However, I reluctantly accept you may have half a point for once - try telling HMRC it's a temporary workplace.

[northernladuk]

You may be working to a set of deliverables and a plan with an end date at <24 months. However, I reluctantly accept you may have half a point for once - try telling HMRC it's a temporary workplace.

Why thank you very much. I think most likely risk is someone ends up breaching 24 months after claiming expenses for 2 years and either doesn't realise and carry's on or suddenly finds they have a massive amount of money they've got to pay back to their LTD pretty sharply. Money that will have been accounted for at the very least once so a right mess to back peddle.

[AnotherJohnDoe]

This is the fourth project I’ve taken on as a contractor in the last 5 years.
The contract duration was 5 months, but now the client has extended it..through the agency.
The agency hasn’t given me clarification on how long the extension is other than it’s ‘ongoing’ (so they have been told by the client)

Anyone been in this situation?
How do you prepare for your next position if the current contract is in a position of ‘rolling’?

The notice period can override the contract end date so it doesn't guarantee anything anyway
But I always ask for an end date
Even if the work is ad hoc the end client has to budget for it so I'm surprised yours is open
But an open ended contract could raise IR35 questions later down the line
So even if the end client isn't sure how long they need your skills, you're best getting the end date nailed down with the agency
If a contract is nearing it's end then I'll ask the agency to enquire about an extension and put the feelers out for other work. Projects do typically run longer than expected but there's no guarantee
I've had rolling contracts in the past as low as a month when starting with a new end client as these days it's usually all decided on a single phone call so there's a lot of risk for the end client
But I've learned to just accept that as par for the course and budget for it