Software developer contracts

[BlasterBates]

I thought contract length didn't matter, even a 3 month contract can be inside IR35? Am I wrong about that?.

Yes a 3 month contract can theoretically be inside, but it would be very straightforward to demonstrate that you were a specialist brought in for a specific task. On a 3 month contract there would be no chance of you being integrated doing general tasks, just isn't possible to work someone in for that, you would be pointed to a task, you'd code it up test it and leave, and of course on a short term project you'd be busy chasing up other clients. That would be pretty much outside IR35. Of course if the contract was worded inside IR35 you'd have to pay up.

On the other hand if you've been in the contract for 2 years chances are you have been switched around projects, mentoring and managing permies etc, in this case you are far more likely to be inside. The investigator would see a high return on his investigation of that single project and he knows full well if you've been there that long you'll be integrated.

Yes so the law doesn't differentiate between short and long term projects. But the way IT contracts work, puts you more inside on a longterm contract.

[Gaz_M]

Nice to know some one agrees with me What is Plan B?

I've read that the length of contract doesn't matter. What HMRC would see is a small salary and a regular high dividend pay. I wouldn't think that they'd care if you had a 12 month contract or 4 x 3 month contracts if they thought all of them should be inside IR35?

But the investigation needed for your example above is 4 x as much effort (and resource) as one contractor doing a 12 month gig. They would also need to win all 4 against just one win to reap the same rewards. If I was in charge I'd tell them to go after the 12 & 24 monthers but I may well be wrong.

[MyUserName]

You could arrange with the client that you will have someone else in your company perform some required research task that you do not have time to do?

It will probably cost your company a grand or so but I would have thought it would be a good IR35 counter as no permie does that.

[MoodyBlue]

You could arrange with the client that you will have someone else in your company perform some required research task that you do not have time to do?

It will probably cost your company a grand or so but I would have thought it would be a good IR35 counter as no permie does that.

That sounds more like sub-contracting than substitution to me.

[northernladuk]

That sounds more like sub-contracting than substitution to me.

It's the same WRT IR35.. well the affect on your status is the same. There seems to be a debate raging about what is subcontract and what is substitution and we had a quite indepth debate on it recently...

Some interesting reading
Contractors' Question: Is my substitution clause IR35-friendly? :: Contractor UK

[MyUserName]

That sounds more like sub-contracting than substitution to me.

Yes, that is what it is meant to be.

[SueEllen]

But the investigation needed for your example above is 4 x as much effort (and resource) as one contractor doing a 12 month gig. They would also need to win all 4 against just one win to reap the same rewards. If I was in charge I'd tell them to go after the 12 & 24 monthers but I may well be wrong.

Some contractors spend years not just the one or two years you quote at a client.

This is longer than some people's permanent jobs.

All the "interesting" cases I read about are contractors who have spent well over 2 years at a client.

Some are IR35 caught and others are not.

The ones who are not have the sense to ensure their contracts are clearly written to be outside IR35 and act accordingly.

[MoodyBlue]

So ClientCo use an agency to sort out the contract and the paperwork. They've said they regularly check their contracts against IR35 and they come out favourable. But of course I will still have it checked by a specialist, any recommendations who I should use? I was thinking QDos?

[northernladuk]

So ClientCo use an agency to sort out the contract and the paperwork. They've said they regularly check their contracts against IR35 and they come out favourable. But of course I will still have it checked by a specialist, any recommendations who I should use? I was thinking QDos?

QDOS do 3 free searches a year if you buy PI/PL with them. I think it is £99 on it's own. Baur and Cotterell do them and SJD and other accountants have started offering them. Personally I stick with QDOS

[MoodyBlue]

Is a clause like this sufficient to prove that a contract is outside IR35?

Nothing in this Agreement shall be construed to mean that the Consultant is
engaged by or is an employee of the Client.

I'll still get QDOS to check it but I like to have discussions when I'm learning.