Potential IR35 Issue with contract?

[ruth11]

This sounds similar to my contract, although you have it better than me!

I am paid £X per Professional Working Day.

The definition of said PWD is:
PWD, This means the Employment Business' payments to the Company for the services of a Consultant based on the provision of up to 8 hours service in any 24-hour period (00:00 to 23:59). In instances where a Consultant provides service in addition to the minimum 8 hours, no extra payment will be made to the supplier until the commencement of the 11th hour. Payment for all additional hours from the commencement of the 11th hour will be made on a pro rata basis of the daily rate divided by 8.

The fact that my contract states the above has had no effect on my IR35 status.

[malvolio]

But the contract doesn't specify what rate i'd be paid for hours 41-45 worked on a weekday??

Yes it does. It says you have to work at least 40 hours but not more than 45 hours a week at Rate1. After 45 hours you get Rate2 per hour for any hours in excess of 45. At weekends you get Rate3.

I assume somewhere else in there it will have defined when weekends start and finish, by the way. And you do realise you could work 15 hours on Monday, Tuesday and Wednesday, have two days off to recover and still only get your base rate?

Next time you get a contract, make sure you understand what the payment terms and rates are before you start: you're a contractor, getting paid is what you do, so you'd better be certain what exactly you will be getting. Or be a bit more professional and go for a flat rate per hour regardless; what you have signed up to here is pretty crap, really.

[Ardesco]

Take the daily rate and divide it by number of hours required for a day. So if it is a 40 hours week rate/8.

Of course if the documentation says that a professional day is 9 hours then the 45 hours is covered in your daily rate. All depends on what the contract says really.

[ssrai]

No it doesn't, it says that for up to 5 hours overtime you get base rate, after that you get whatever £xx.xx is per hour. You still get paid for working, and don't get paid for not working, which is fair enough.

But the contract doesn't specify what rate i'd be paid for hours 41-45 worked on a weekday??

[malvolio]

No it doesn't, it says that for up to 5 hours overtime you get base rate, after that you get whatever £xx.xx is per hour. You still get paid for working, and don't get paid for not working, which is fair enough.

Not really anything to do with IR35, it's merely setting out the payment terms. The only possible weakness is the 40 hours per week stipulation, which implies D&C - but as long as it doesn't say when you have to start and finish (further subject to those times applying to permies and contractors because of the job), you should be OK.

You can get it reviewed at any time, of course, it's just you will have a hard time changing anything until renewal, which is essentially a new contract debate.

[Ardesco]

No way you can tell if it is inside or outside IR35 based solely on the rate you earn.

Is it a typo?

Does the contract define how many hours are in a working day? (They may define a working day as 9 hours).

Really can't answer with the info you have provided.

[ssrai]

I've recently started a contract which has the following T&C's within the contract:

Assignment Hours: 40 hours per week
Contract Rate: The rate of £xxx per day
Weekday Authorised Additional Hour Rate after 45 hours: The rate of £xx.xx per hour
Weekend Authorised Additional Hour Rate: The rate of £xx.xx per hour


Basically, this means I need to work 5 hours for 'free' before I an entitled for any overtime payment (i.e for hours worked over 45 hours per week).

Does anyone have any thoughts about whether this contract (based on the excerpt above) is inside IR35? The 5 'free' hours that I'd need to work before claiming weekday overtime seems a bit fishy to me (i.e something you'd see in a permie contract)

If a contract extension is offered (due for renewal mid june) , i'll get the contract properly reviewed.

Thanks