Unusual contract scenario

[BolshieBastard]

Been offered the following:
yearly rolling contract at a fixed price (approx 87% of current day rate)
Contract is against an internal project for the client (which is essentially ficticious). Each year/fixed price contract there are 12 milestones that result in a 1/12th payment of the contract value
alongside this I have been told that I will be able to take 20 days off per year without reducing the contract value.
contract is worded so it's:
fixed price (does this mean MOO is not an issue?)
own materials
no direction on how to work (specifically states that I can do the job how i like as long as I get the job done) and no specification of me being the responsible person for delivering.
should an investigation take place the company will draw up the required purchase orders to show each milestone and will confirm working conditions are outside of IR35

You're all probably hearing the same alarm bells I did when i heard about it but just wanted to get another opinion. There's obviously a lot of trust being put in the client to deliver the correct words to hmrc if they should ask but apart from that.....does it tick the boxes you'd expect to be outside of IR35?

Think I'll get it checked over anyway

What's this? Smells like disguided permiedom, sounds like disguised permiedom, quacks like disguised permiedom.

Take it at your own risk IMO but I wouldnt touch it.

[farout117]

What's this? Smells like disguided permiedom, sounds like disguised permiedom, quacks like disguised permiedom.

Take it at your own risk IMO but I wouldnt touch it.

I would say negotiate a proper contract with them, maybe a 3 month rolling contract, with proper deliverables, and see if they are really genuine about this project. If they come with excuses............run.

Smells fishy to me though

[Wanderer]

fixed price (does this mean MOO is not an issue?)
own materials
no direction on how to work (specifically states that I can do the job how i like as long as I get the job done) and no specification of me being the responsible person for delivering.
should an investigation take place the company will draw up the required purchase orders to show each milestone and will confirm working conditions are outside of IR35

I wouldn't accept any artificially contrived arrangements or anything retrospectively added to the contract in the event of an investigation as that is dishonest. But there is nothing to stop you creating milestones and putting that on your invoice when you submit it and this may be evidence of a more business like relationship.

The direction and control that IR35 requires is missing from this engagement. I'd talk to them about getting a subbie in there at some stage and make sure that was all OK and then go right ahead and take the contract.

If you are rejecting the contract due to the rate and duration then that's fine but out of respect to the client and the person who will eventually take the contract, please don't upset a client who is obviously bending over backwards to make the engagement a business to business one rather than an IR35 caught disguised employee.

[Sockpuppet]

You do realise that there is a principle in which if HMRC believe something is invented to avoid tax they are allowed to ignore it. Never mind IR35 they will just rock through with this.

Have we even started to look at 87% of current contract = looks suspiciously like they've taken out the employer NI portion.

In short I'd say that no-one in this relationship really know what they are doing. If they're serious take the contract but do it as self employed person not through a LTD.