Invoicing without contract

[Wils]

Question on behalf of my other half. She has beed offered work on a freelance basis (non IT) by someone she knows in her field of work. She trusts him to pay and there are no formal arrangements between them i.e. no contract. She is comfortable with this arrangement.

However, what are the implications for invoicing for work when there is no written contract? Also, from what I understand, she is well outside IR35 (works from home sometimes and working locations can vary; no fixed hours of work as such, just has to be at meetings and events; has her own equipment). So is this all straight forward or are there any gotchas?

[TestMangler]

Tell her to get a purchase order from the client. A call-off type arrangement with a number of days purchased.

[cojak]

Tell her to get a purchase order from the client. A call-off type arrangement with a number of days purchased.

WTMS (Beat me to it! )

[Wils]

Tell her to get a purchase order from the client. A call-off type arrangement with a number of days purchased.

Thanks for quick reply. Can you expand what call-off type arrangement means? Should she not invoice and use the purchase order instead? Sorry for being green.

[tractor]

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Thanks for quick reply. Can you expand what call-off type arrangement means? Should she not invoice and use the purchase order instead? Sorry for being green.

A framework agreement that may or may not contain a budgetted no of hours/days/weeks. PO's are called off by the client purchaser against that agreement until it runs out or is renewed.

Gov depts use them frequently. I am sure if you trawled, you could find a model agreement somewhere, maybe on the PCG site? I haven't looked for ages so I couldn't be sure.

And yes, she would still invoice quoting the purchase order number. It is important to agree the most favourable payment terms that she can up front though.

[Jessica@WhiteFieldTax]

Two issues.

First, there is never no contract - it may be unwritten, but it's still there if work is done and payment made. I know that's pedantic, but it's important to understand the basis.

Second, is she contracting as a sole trader or through a company? I get the impression sole trader, in which case the risk if HMRC come along and challenge status is with the engaged, almost a reverse of IR35.

[TestMangler]

Thanks for quick reply. Can you expand what call-off type arrangement means? Should she not invoice and use the purchase order instead? Sorry for being green.

Client issues a purchase order for a number of days they wish to purchase. The terms and conditions under which the services are requested is normally on the pack of the P.O. !

So, for example, the purchase order is for 60 days of services, you're Mrs does three days one week, five another, two another etc and invoices for time used at agreed intervals (weekly, fortnightly, monthly or whatever as agreed with the client). When the number of days invoiced = the number of days ordered, then the PO is considered complete and the client can raise another for more if they want.

I know some people on here will disagree, but as the PO T&C's are usually based on proper B2B type requirements, then you don't have the normal 'contract' issues like specified working hours, employee like demands from the client etc. When i got IR35'd a few years ago, I had done several contracts based on call-off PO's. HMRC looked briefly at the PO's and ignored these periods.

Most contractors have never dealt with a PO situation, so it is safe to ignore their opinions on how it works

[Wils]

Client issues a purchase order for a number of days they wish to purchase. The terms and conditions under which the services are requested is normally on the pack of the P.O. !

Thanks for all the help. What is the problem with just invoicing without the purchase order?

It's a good opportunity for her and unlike us hard-nosed IT contractors she just wants to keep things as simple as possible and get on with the work without causing too much administrative hassle as the experience she is getting is invaluable.

[tractor]

...

Thanks for all the help. What is the problem with just invoicing without the purchase order?

It's a good opportunity for her and unlike us hard-nosed IT contractors she just wants to keep things as simple as possible and get on with the work without causing too much administrative hassle as the experience she is getting is invaluable.

It has been known for an accounts department to refuse to pay invoices without a PO which is usually authorised by a budget holder. It can be a big risk relative of course to the amount of work carried out on the clients' behalf.

[TestMangler]

Thanks for all the help. What is the problem with just invoicing without the purchase order?

It's a good opportunity for her and unlike us hard-nosed IT contractors she just wants to keep things as simple as possible and get on with the work without causing too much administrative hassle as the experience she is getting is invaluable.

No offence dude, but you asked for help, got some from someone who knows how to do it (having actual experience of such, which is bloody unusual on CUK) and you come back and suggest your own way of doing it.

My advice would be, f**k off and do it your own way ! Is that better ?