Named project on contract, 'moonlighting' on other projects at ClientCo?

[d000hg]

I've worked on and off with a client over the years in a fashion I evaluate to being well outside IR35 - and they're small enough to escape the newer rules so it IS up to my evaluation.

I have historically worked on various projects - typically each contract involves work 90%+ on a single project but with a bit of overlap or 'moonlighting' - e.g. I developed an application 2 years ago and since I'm working with the company right now, I get asked to do odd fixes on it.

I have a draft renewal contract for 2022 and the one thing it doesn't have is explicit mention of the project. I've seen this getting mentioned more of late and as IR35 only gets tighter I'm keen to do all I can to cover myself. It's been discussed I'm offerwered renewal due to resource requirements on a specific project but it's not in B&W.

So, 1. How big a deal is this, really? And 2. what is the situation if your contract does mention Project X but you get asked to do a few hours/days/weeks on Project Y? Say a side-project comes up and they ask me to do it rather than take someone off the core permie team for instance, and I want to do it.

[ladymuck]

Technically, you should ask for an addendum schedule to the contract for the side work and have time/cost allocated to it.

On a more pragmatic note, I would say an email exchange that summarises the extra work and how long it will take ought to be good enough. Save it with your contract paperwork.

You need to be able to show that you're not being directed to do the work, or that the client is demonstrating an obligation to offer you the work. Hopefully the form of the correspondence is along the lines of: "would you be interested in doing this for us as well" and you saying "yes, I can fit that in next month" or "no, I cannot do that at this time" and the client accepting or negotiating accordingly.

I am rather of the opinion that direct to the client work, or any work that doesn't go via a recruitment agency, is a bit safer. My reasoning being that it's agency reporting that I suspect gives HMRC their leads for IR35 investigations. I have absolutely no facts to base that assertion on as it's just a gut feel.

[northernladuk]

I've worked on and off with a client over the years in a fashion I evaluate to being well outside IR35 - and they're small enough to escape the newer rules so it IS up to my evaluation.

I have historically worked on various projects - typically each contract involves work 90%+ on a single project but with a bit of overlap or 'moonlighting' - e.g. I developed an application 2 years ago and since I'm working with the company right now, I get asked to do odd fixes on it.

I have a draft renewal contract for 2022 and the one thing it doesn't have is explicit mention of the project. I've seen this getting mentioned more of late and as IR35 only gets tighter I'm keen to do all I can to cover myself. It's been discussed I'm offerwered renewal due to resource requirements on a specific project but it's not in B&W.

So, 1. How big a deal is this, really? And 2. what is the situation if your contract does mention Project X but you get asked to do a few hours/days/weeks on Project Y? Say a side-project comes up and they ask me to do it rather than take someone off the core permie team for instance, and I want to do it.

It's a massive deal IMO. Small companies are a nightmare for IR35 as they are generally too small to have all the elements to take the work off your hands and land it somewhere in BAU. It often comes back to you at some point and with them being small it's often all hands to the pump and you all muck in where required. To come in and do purely what you are contracted to do is pretty rare I think.

So that said I think you have to nail down the paperwork and work even hard on your working practices than ever. You can't be a yes person in these setups but it's also hard to say no to client that is pressuring you.

So having no statement of work in that situation means you almost certain to fail D&C at some point. If you are asked to do a few hours/days/weeks on project Y then you fail D&C again. It's pretty basic IR35 stuff. Being asked to work of SoW work is an IR35 problem. Not sure why you think your situation is any different.

Being asked to move projects and muck in is perm world, not outside IR35. You 'could' mess about with the paperwork and have an overarching engagement contract and then get them to issue a new SoW for each piece of work but will have two problems for you. Firstly is the adhoc work they want you to do big enough for a SoW or is it just a quick favour and secondly the new SoW's will only stand up if it is representative of the situation. If it's just a smoke screen to try cover up an IR35 D&C problem then it's won't stand up to even the most basic scrutiny so a bit of a waste of time.

If you are engaged with a client and they are asking you to do adhoc work you've got a problem, just as you've always had since IR35 came in. Problem is it big enough to worry about and what are the chances you'll get caught.

[northernladuk]

Just to point out, my response above is my usual blunt binary style. Remember, exactly what you describe has been going on in every small and even medium/large clients since IR35 began. It's nothing new so not the insurmountable problem my post may make it look.

[malvolio]

Be mindful (very mindful!) of the recent PGMOL court case. It is now established that it is the entirety of the working practices that are the measure of inside or outside, regardless of client size exemptions. You have to be certain that how you work and how the client see how you work are both consistent with each other and with an outside determination. the old three bullets are still important but they are no longer the whole thing. As for contractual wording, well it is a nice read but ultimately meaningless as an IR35 defence (although obviously important for everything else).

[d000hg]

Surely being asked Vs told is quite a big difference? I haven't simply got a Jira assigned me, PM on project Y has asked me "would you be able to do this" and I typically chat with them and PM of project X to see what makes sense. That doesn't to me seem like how an employe would be treated, they'd just get told what the PMs have decided.

Or is that all far too low-level for IR35 purposes?

One thing I've noticed is that in real terms, Covid means my day-to-day practices are less different to the permies. I have always worked 100% WFH on hours of my choosing but that's now closer to how the company works anyway. Hence the desire to tighten things a bit. In reality I reckon I'm well under the radar but one has to think years down the line.

[jamesbrown]

What matters (has always mattered) is the working practices in the round. Some contractors get so worked up about every little potential "IR35 tell" that they completely forget to operate a proper business. The reality is that, when an excellent client asks for some extra help, it is good business sense to help them. By all means, get a small statement of work to reflect the additional thing, but you don't just want that for IR35 reasons, you want that so that expectations are aligned. Mostly, if you actually get into the mindset of operating as a business, IR35 falls into place. Bear in mind that a statement of work can be as simple as an e-mail exchange if the contract acknowledges this.

Regarding whether it is a big deal in your specific case, it is hard to know for sure without understanding your working practices more generally. The important thing about requirements that are unclear upfront is that they are crystalized at the point they are known. For example, one option is to have a fact finding stage, which follows with more detailed requirements afterwards. On the other hand, if you are literally being contracted as an extra hand to fill in for gaps on an ad-hoc basis because they simply don't have the permie support at any given moment, and there is an expectation of MoO regarding what is offered and accepted, then that is obviously a different situation, probably inside IR35, regardless of contract words. That doesn't sound like the situation you are describing.

A long-term relationship with a good client whereby you are offering expertise on various projects for which they don't have those skills in-house and where you are working several other contracts at the same time will, in the round, show that you are outside IR35 on this specific contract. Everything else is details. But, for business reasons, it is important to crystalize the work to be done at the moment it is known and to formalize this on some level (e.g., with an exchange of e-mails that you can print as evidence of the agreement made).

[northernladuk]

What matters (has always mattered) is the working practices in the round. Some contractors get so worked up about every little potential "IR35 tell" that they completely forget to operate a proper business. The reality is that, when an excellent client asks for some extra help, it is good business sense to help them. By all means, get a small statement of work to reflect the additional thing, but you don't just want that for IR35 reasons, you want that so that expectations are aligned. Mostly, if you actually get into the mindset of operating as a business, IR35 falls into place. Bear in mind that a statement of work can be as simple as an e-mail exchange if the contract acknowledges this.

Absolutely right and for someone like dhooog he should be able to tell the difference between extra consultancy work and part and parcel but the guy Kloos in the other thread going hasn't got a scooby. Gotta be very careful and self critical here. What could be a business adding value in the first instance can easily be seen as part and parcel by the 4th time the client asks. It's actually pretty hard work trying to stay outside IR35 at some clients.

Regarding whether it is a big deal in your specific case, it is hard to know for sure without understanding your working practices more generally. The important thing about requirements that are unclear upfront is that they are crystalized at the point they are known. For example, one option is to have a fact finding stage, which follows with more detailed requirements afterwards. On the other hand, if you are literally being contracted as an extra hand to fill in for gaps on an ad-hoc basis because they simply don't have the permie support at any given moment, and there is an expectation of MoO regarding what is offered and accepted, then that is obviously a different situation, probably inside IR35, regardless of contract words. That doesn't sound like the situation you are describing.

It doesn't to me either but the extra work can easily become expected and drift in to that, particularly over time. Diligence and client management is required.

A long-term relationship with a good client whereby you are offering expertise on various projects for which they don't have those skills in-house and where you are working several other contracts at the same time will, in the round, show that you are outside IR35 on this specific contract. Everything else is details. But, for business reasons, it is important to crystalize the work to be done at the moment it is known and to formalize this on some level (e.g., with an exchange of e-mails that you can print as evidence of the agreement made).

Totally but keep on top of it. Don't let it slip. JLJ lost part of his case because he let it slip and in 'normalised' to the point he lost.

[northernladuk]

Surely being asked Vs told is quite a big difference? I haven't simply got a Jira assigned me, PM on project Y has asked me "would you be able to do this" and I typically chat with them and PM of project X to see what makes sense. That doesn't to me seem like how an employe would be treated, they'd just get told what the PMs have decided.

Or is that all far too low-level for IR35 purposes?

It really comes down to what the client expects. HMRC will interview them and if they've got complacent and they expect you to do it more times than not then you are screwed. If they keep asking, some gets turned down, the stuff that gets accepted gets added to the SoW then you are probably OK. Try to keep an eye on the client and make sure they don't drift in to normality. Time isn't your friend on gigs like this. Couple of years in and I'd bet everything I have it won't be the same situation as when you started off.

One thing I've noticed is that in real terms, Covid means my day-to-day practices are less different to the permies. I have always worked 100% WFH on hours of my choosing but that's now closer to how the company works anyway. Hence the desire to tighten things a bit. In reality I reckon I'm well under the radar but one has to think years down the line.

The fact you've even considered this puts you way above a lot of people in your position and is great for any defence if you needed. You've your eye on the ball so I'd guess you've got IR35 pretty well covered here just by considering it. Just a bit of client management and not getting part and parcel and things should be fine.

[malvolio]

Just for perspective, my last real contract of any significance was to provide Service Architecture skills to the bid response group. That was what the contract schedule stated. In essence I could be invited to join in on any particular bid request from their potential clients, initially to assess the suitability of what they could offer in response, provide my view on the go/no go decision and then to design and cost the service proposal to meet the ITT.

Each one was opened by an email from the bid leader with a copy of the original ITT. As far as everyone was concerned that was the schedule amendment. And obviously I could accept, refuse or tell them not to even bother. After that, how I produced what was needed was down to me, within the overall project timescale.

The whole process does not need to be wrapped in legalese if everyone is agreed on the actual relationship.

As for MoO, I charged each bid project for time worked. Luckily, I was pretty much fully engaged