IR35 & No Right of Termination

[Kyajae]

This morning, I had a pimp email me his agency's standard T&Cs with a view to a future gig. Like most 'standard' contracts, everyone has the right to terminate the contract either immediately or with a notice period depending on the circumstances except the contractor.

Whn I asked why the contractor had no right to give notice, he reckons such a clause brings the contract and the contractor into IR35.

Is this right?

[malvolio]

Yes. It is a pointer away from employment, since employees have to be given notice. Nice to find an aency that understands the rules for once. Take it.

[Sockpuppet]

Yes. It is a pointer away from employment, since employees have to be given notice. Nice to find an aency that understands the rules for once. Take it.

But the company are still giving notice? Its just that the contractor has no rights at all to cancel the contract if I read that right.

[Kyajae]

But the company are still giving notice? Its just that the contractor has no rights at all to cancel the contract if I read that right.

Spot on

[Sockpuppet]

In that case he is bulltulipting. Tell him that you want equal rights to cancel the contract as the client.

If he says "that looks unprofessional etc" just tell him its equal rights or no deal.

For my next contract I am seriously thinking of adding in a "if the contract is terminated early a fee of £<pick an amount> will become payable by the client".

As notice periods are not worth tulip.

[cojak]

Do not listen to sockpuppet.

If you do want the opportunity to give notice, ask for one month and offer the agency the right to terminate immediately without giving cause.

You're not an employee.

(Unless you want to be, of course...)

[malvolio]

In that case he is bulltulipting. Tell him that you want equal rights to cancel the contract as the client.

If he says "that looks unprofessional etc" just tell him its equal rights or no deal.

For my next contract I am seriously thinking of adding in a "if the contract is terminated early a fee of £<pick an amount> will become payable by the client".

As notice periods are not worth tulip.

Really don't get it, do you? You are there to provide a service, as soon as that service is completed the client needs to be able to drop you ( It's called "contracting" ) or else face paying you to do nothing. And since being paid to do nothing equates to Mutuality of Obligation then you are firmly in line to be regarded as an employee and you should be paying IR35 levels of taxation.

Of course, if you really want to be an employee of your client, albeit one without any rights or benefits, then go right ahead. But do not advise others to do the same damn silly thing.

[Denny]

This morning, I had a pimp email me his agency's standard T&Cs with a view to a future gig. Like most 'standard' contracts, everyone has the right to terminate the contract either immediately or with a notice period depending on the circumstances except the contractor.

Whn I asked why the contractor had no right to give notice, he reckons such a clause brings the contract and the contractor into IR35.

Is this right?

No notice is better than an unqualified notice period, but it's not the only option to stay outside iR35. You can have reciprocal notice periods of 4 weeks without jeapordising your IR35 exempt status provided the reasons for your notice are clearly stated around just finishing off deliverables the client wants you to finish mid contract not about keeping busy for the sake of it. For example, if you are extended for 6 months and then after 3 months the project budget is pulled and there is no work left requiring your expertise, then exercising your notice would be inappropriate, as it would imply that you want certain 'rights' to look round for another job without the added financial burdens of being out of pocket - in that case you could spend the next four weeks watering the company's flowers and helping out on overspill work that has nothing to do with your expertise. If, however, someone internal is about to take over your role at short notice, but there is still work outstanding for you, then you can negotiate a four week handover (as per the terms of your contract) to the new internal bod.

A qualifying statement in the contract is fine to make that clear. Business notice is not the same as employee notice.

[Burdock]

Denny- good to see you back

[kingshuk]

Hey, welcome back denny!
Great to see you posting again