Consultancy witholding 20% of each invoice in new contracts

[simes]

Might take contractors closer to being consultancies that are always subject to penalty clauses etc. If it's enough to move the IR35 dial, I'd be fine with it.

But, it would have to be deliverable based and not some arbitrary clock watching scheme.

Might work.

[LondonManc]

OK, so budget taking the 80% and would you still accept the contract? If you're after 600 per day, quote 750 as your day rate. Moving goalposts still gets you your original figure and you can set precedents arguing the toss.

[SussexSeagull]

If it is an attempt to make contractors act more like external suppliers with a view to helping towards IR35 then well worth exploring. However being a tester I have been involved in too many projects that are already late before you have the chance to start test execution (and have seen developers either twiddling their thumbs waiting for requirements to be signed off or having to make changes after someone changes their mind).

[MonkeysUncle]

I have spent the last 4 years bouncing around public sector (NHS Trusts and Council) and never come across this.
I did have something similar in my second contract which was for a large rail/transport company.
It wasnt based on performance but rather 10% was kept provided I stayed till the contract end and didnt leave early.
As someone who was starting out in the contracting world I was happy to get that second contract so quickly that I took it.
Stayed till the end of the project and got the 10% 'bonus' at the end.

Looking back now, with more experience and knowledge under my belt, I wouldnt go for it again.

[perplexed]

See the CEST criteria for a contract being outside IR35 - one of the criteria is financial risk.

Every invoice you submit carries financial risk, ie agency going into liquidation.

[perplexed]

I'm happy to be proven wrong, but not sure it's something that would help one iota.

Smacks to me more of incentivisation to prevent contractors leaving contracts than anything else.

[BigDataPro]

I recently accepted extension with similar conditions. Consultancy & Govt Client. Retained 20% will be paid based on deliverables. I was perfectly comfortable accepting it, rather than being 'inside' or 'jobless'

[LondonManc]

I'm happy to be proven wrong, but not sure it's something that would help one iota.

Smacks to me more of incentivisation to prevent contractors leaving contracts than anything else.

Excellent point and far more cunning than a no-notice clause. As soon as the first contractor does not get their 20% for no valid reason, the noise and avoidance of the client would be too much.