Consultancy Per Project vs General Consultancy Services

[Murder1]

I had my current contract reviewed by QDOS and one of the things both I and they were keen to do to protect against IR35 was to ensure it was project specific.

The contracted project is still in full flow however I've been asked to provide both consultancy from a project perspective as well as development of an interim application on another project which has just been launched.

My initial feeling here is that by doing so I'm at risk of IR35 as I'm now being used essentially as an internal resource and I should insist on a contract being drawn up for the new project - however this just has a feeling of being both difficult and pedantic.

What are peoples opinions?

[malvolio]

I had my current contract reviewed by QDOS and one of the things both I and they were keen to do to protect against IR35 was to ensure it was project specific.

The contracted project is still in full flow however I've been asked to provide both consultancy from a project perspective as well as development of an interim application on another project which has just been launched.

My initial feeling here is that by doing so I'm at risk of IR35 as I'm now being used essentially as an internal resource and I should insist on a contract being drawn up for the new project - however this just has a feeling of being both difficult and pedantic.

What are peoples opinions?

Not if you get an amended scehdule to add in the additional work as a separate objective (or even a whole additional contract, but that 's overkill in reality).

As a consultant you are not part-and-parcel of the client organisation, which is the basis of your IR35 defence: like me, you can do generalised work but within a specific remit.

[Kelstar]

Can you draw up a separate engagement schedule for the non project specific work? Set out deliverables etc..

[MyUserName]

You will be at risk of IR35 if you start doing duties which are not in your contract. This is because employees generally have an 'other duties as assigned' role - if you start actually doing that as your day to day work rather than what is explicitly stated in your contract it is a strong indicator that you are part and parcel of the organisation.

I guess you should have your contract updated to reflect this new role.

[Murder1]

Thanks guys,

Having thought this through a bit more I can relate the development work on the second project to my contracted project - therefore I can argue away that it is covered by the existing agreement.

[GB9]

This is a good example of why IR35 is such an unfair law and is seriously weighted against real businesses.

Every company director has a duty to do the best thing for its company shareholders (regardless of who they are) whilst staying within the law. You have an opportunity to bring in additional income (which most companies would want to do), but to do that without falling foul of IR35 you have to go through a series of hoops, loops and other general obstacles that the likes of IBM etc. definitely wouldn't need to go through.

And as for work being project specific, that is almost saying that in order to fall outside IR35 you can only work on projects. What would be the situation I wonder if you provided consultancy services and your role was to introduce best practice in an organisation? Would that put you within IR35?

[kingcook]

I would get the contract schedule amended for sure.

You could remind the client that you are giving services as a consultancy and e.g. your professional indemnity insurance may not cover work not specified in the contract (not sure on the actual truth there but it sounds plausible!)

If you choose not to update the schedule, you may find that something else could just pop up in the near future that needs working on.

[northernladuk]

Thanks guys,

Having thought this through a bit more I can relate the development work on the second project to my contracted project - therefore I can argue away that it is covered by the existing agreement.

You can but can HMRC is the question. You have a clouded view as you are there and 'relating' is just what HMRC are looking for to nail you. Doesn't matter if it is related to, the same as etc... if it isn't in your current deliverables you need another contract. Most permies get asked to do work related to what they are doing so just won't cut it.

[northernladuk]

This is a good example of why IR35 is such an unfair law and is seriously weighted against real businesses.

Every company director has a duty to do the best thing for its company shareholders (regardless of who they are) whilst staying within the law. You have an opportunity to bring in additional income (which most companies would want to do), but to do that without falling foul of IR35 you have to go through a series of hoops, loops and other general obstacles that the likes of IBM etc. definitely wouldn't need to go through.

And as for work being project specific, that is almost saying that in order to fall outside IR35 you can only work on projects. What would be the situation I wonder if you provided consultancy services and your role was to introduce best practice in an organisation? Would that put you within IR35?

Yes and no... You are right IR35 is unfair but not in this case. As a director you are also responsible for picking up and carrying out work to the contract, not taking backhanders and doing a bit here and there. In this case he can act like a director, he can bid for an extra piece of work and enter in to an agreement to carry it out. IR35 safe and the proper way to do it. IR35 is not hampering the OP's ability to take on extra work like a business but is a problem if the OP wants to act like a permie.

[GB9]

Yes and no... You are right IR35 is unfair but not in this case. As a director you are also responsible for picking up and carrying out work to the contract, not taking backhanders and doing a bit here and there. In this case he can act like a director, he can bid for an extra piece of work and enter in to an agreement to carry it out. IR35 safe and the proper way to do it. IR35 is not hampering the OP's ability to take on extra work like a business but is a problem if the OP wants to act like a permie.

I agree in part.

Serious question: how would you protect against IR35 if a client asked you to provide mentoring services for say 3 months to their project management team? The reason I ask is that anything project specific seems to be easy to cover. Anything else, not so. Another example may be support analysis services.