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IR 35 and Contracts/SOW

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    IR 35 and Contracts/SOW

    I’d appreciate if you could answer a quick question relating to IR 35, as I’m a somewhat awkward position with a client I do approximately 2 days a week for who are based on Switzerland.

    We are working on various things with the idea that I’ll be working on different projects throughout the year. This is a continuation and extension of project work that was done last year.

    My contact there, who I work with, send me a draft contract and SOW at Christmas, which was already late. At the end of January she apologised profusely for not sending it back up the chain and completing some parts of it. I said, as long as it’s there in a few weeks it should be fine. She said a few days.

    March came and I asked her what was up and she said it was still sitting with her boss.


    Obviously it’s not ideal to be working outside of contract, despite the high level of trust we have for each other and the question is.

    Is there a major issue if I don’t have a signed SOW showing it’s a project based relationship before IR 35 comes in in April? How hard should I push them based on that factor.

    #2
    Originally posted by MJL View Post
    I’d appreciate if you could answer a quick question relating to IR 35, as I’m a somewhat awkward position with a client I do approximately 2 days a week for who are based on Switzerland.

    We are working on various things with the idea that I’ll be working on different projects throughout the year. This is a continuation and extension of project work that was done last year.

    My contact there, who I work with, send me a draft contract and SOW at Christmas, which was already late. At the end of January she apologised profusely for not sending it back up the chain and completing some parts of it. I said, as long as it’s there in a few weeks it should be fine. She said a few days.

    March came and I asked her what was up and she said it was still sitting with her boss.


    Obviously it’s not ideal to be working outside of contract, despite the high level of trust we have for each other and the question is.

    Is there a major issue if I don’t have a signed SOW showing it’s a project based relationship before IR 35 comes in in April? How hard should I push them based on that factor.
    you should push them hard on the basis that might be working for free. delivery against a sow is your proof of work.
    Unless the sow is just a sham to get you around ir35.
    See You Next Tuesday

    Comment


      #3
      Originally posted by Lance View Post

      you should push them hard on the basis that might be working for free. delivery against a sow is your proof of work.
      Unless the sow is just a sham to get you around ir35.
      What was the point about the SOW being a sham for IR35 for? It seems totally redundant given that if I was trying to get out of IR35 I probably would want to be paid as well, since otherwise, there's nothing to get out of. It was also very rude.

      The question was very simple and yet I didn't get an answer, so why did you bother replying?

      To reiterate for people who might care. I have a good relationship with them and they are slow with their paperwork. They won't not pay me, as they just paid my last invoice without question, as they always have because we do good work for them (sometimes I hire freelancers to help).

      Does not having a SOW or contract make me inside of IR35?

      Comment


        #4
        If the supply chain is fully overseas, then it's BAU after 6 April - YourCo is still responsible and liable for administering IR35.

        The other stuff is orthogonal to IR35. Working without a contract is a very bad idea, commercially speaking. You are working at risk. The IR35 risk is trivial in comparison, since "at risk" here means 100% of the money you are owed.

        Comment


          #5
          Originally posted by MJL View Post
          Does not having a SOW or contract make me inside of IR35?
          IR35 has never been that simple. Having a clear statement of work will generally help, but it really depends on your working practices in the round. This is why there are professionals available that review contracts and working practices.

          Anyway, forget about IR35 until you've mitigated the commercial risk. Regardless of how much you trust the client, it is a very stupid move to work without a contract and you'd be well advised never to do that again (assuming you want a viable business in the long term).

          Comment


            #6
            Originally posted by jamesbrown View Post
            If the supply chain is fully overseas, then it's BAU after 6 April - YourCo is still responsible and liable for administering IR35.

            The other stuff is orthogonal to IR35. Working without a contract is a very bad idea, commercially speaking. You are working at risk. The IR35 risk is trivial in comparison, since "at risk" here means 100% of the money you are owed.
            Thank you very much for your considered reply.

            Comment


              #7
              Originally posted by jamesbrown View Post

              IR35 has never been that simple. Having a clear statement of work will generally help, but it really depends on your working practices in the round. This is why there are professionals available that review contracts and working practices.

              Anyway, forget about IR35 until you've mitigated the commercial risk. Regardless of how much you trust the client, it is a very stupid move to work without a contract and you'd be well advised never to do that again (assuming you want a viable business in the long term).
              Thanks very much for the considered reply. I would ask you to consider that in my shoes, it may have been more stupid not to be doing this work than not, since otherwise, due to personal circumstances I'd rather not go into, I'd not have any work right now and wouldn't have been paid since December's invoice. It's certainly not ideal, but to say it's stupid, it's a bit presumptive.

              Comment


                #8
                Originally posted by MJL View Post

                Thanks very much for the considered reply. I would ask you to consider that in my shoes, it may have been more stupid not to be doing this work than not, since otherwise, due to personal circumstances I'd rather not go into, I'd not have any work right now and wouldn't have been paid since December's invoice. It's certainly not ideal, but to say it's stupid, it's a bit presumptive.
                No presumption necessary, it's there in your OP in black and white; you're working at risk for an indefinite period. As I say, IR35 is the least of your worries. The time spent working for potentially no money could've been spent seeking alternative work. What if this mythical contract is still sitting with her boss in September? I fear you're in too deep now and won't be able to cut your losses.

                Comment


                  #9
                  Originally posted by jamesbrown View Post

                  No presumption necessary, it's there in your OP in black and white; you're working at risk for an indefinite period. As I say, IR35 is the least of your worries. The time spent working for potentially no money could've been spent seeking alternative work. What if this mythical contract is still sitting with her boss in September? I fear you're in too deep now and won't be able to cut your losses.
                  You're assuming that I could quickly get another contract, which is a presumption on your part with no basis. In the meantime, I have been paid and have a good relationship with them.

                  There is no debate that it's not ideal to be doing business without a contract in place, but to say it's stupid is presumptive - I even stated that I didn't want to disclose personal circumstances. Just to be clear, I am working to get other work, but can only take on so much.

                  I'm not working at risk for an indefinite period - I'm working on a monthly basis for them and am going to be chasing them again soon - I did last week. There is a good relationship and I'm being paid.

                  Your unifactorial analysis of my situation is presumptive.

                  Comment


                    #10
                    Originally posted by MJL View Post

                    You're assuming that I could quickly get another contract, which is a presumption on your part with no basis. In the meantime, I have been paid and have a good relationship with them.

                    There is no debate that it's not ideal to be doing business without a contract in place, but to say it's stupid is presumptive - I even stated that I didn't want to disclose personal circumstances. Just to be clear, I am working to get other work, but can only take on so much.

                    I'm not working at risk for an indefinite period - I'm working on a monthly basis for them and am going to be chasing them again soon - I did last week. There is a good relationship and I'm being paid.

                    Your unifactorial analysis of my situation is presumptive.
                    There isn't a good relationship because you don't have a contract. You're being treated poorly because you're willing to accept it.

                    Anyway, good luck to you. Get your non-contract and working practices reviewed at your earliest convenience because your company remains responsible and liable both now and after April 6 (unless there is a company, such as an agency, above yours in the supply chain with a UK connection). Also, do some reading on IR35. Resources over there -->

                    Comment

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