Reply to: Client wanting to set objectives/appraisal

[centurian]

Most ClientCo managers can be reasonable if you are up-front. In most cases they don't realise the implications of what they are suggesting. If they can see that it makes them more attractive as a client for them to provide a safer tax environment, most will be happy to comply.

However, you can get some awkward (i.e. envious) buggers who just won't budge. "Your tax affairs are not my problem" is what my first client manager said when I wanted to operate differently.



And if they are being awkward/envious rather than naive, be very, very careful - even if they do back down on that issue. Bear in mind that at any point in the future, if they give a statement to HMRC saying that they considered you to be a disguised employee, you're royally shafted - as Dragonfly was when the AA manager landed him in the tulip.

[Acme Thunderer]

It's for everyone - Even if it is only objective setting I'm wary as they have team objectives and department objectives, which sound a little too much like part and parcel of organisation for comfort. I think a full and frank conversation with the clientco manager is coming.

[centurian]

Why Dragonfly got caught by IR35 :: Contractor UK

This should be mandatory reading for all contractors - or better still, the actual judgement itself in full.

It's amazing how many viewpoints and perceptions are taken as fact despite this judgement. Two examples:-
* Succession of renewals have zero effect on IR35 status
* Concurrent contracts pretty much put you outside

In the judgement, both of these long accepted opinions were blown apart.

[prozak]

Excellent thread.

Relevent to me and I didn't even realise.

I recently moved into a different team and they spoke of objectives etc.

I think we are talking about specific work deliverables that we are agreeing, however, this thread has certainly opened the eyes and I need to make sure they understand the difference.

[xisystems]

I thought I would add this experience to the collective, on my current contract the perm's have just been through a professional review / appraisal process, Quite interestingly all the contractors on the team ended up with letters of commendation. any one else had this before?

[BlasterBates]

Be up front and honest, just tell them that being part of an appraisal will put you in big trouble with the taxman because you are outside IR35, very sorry but you just can't do that, it would mean changing the contract, bureacratic nightmare etc etc.

Getting caught in IR35 is expensive, you don't want to go there.

[Old Greg]

Suggest that you sit down with them to review the fit between the services you provide and their business requirements. You would like to cover both the past and ongoing requirements so you can continue to offer value for money.

[Jog On]

Thanks for the advice - fits with what I had been thinking.

Contract is due up in 2 months and I'm not that keen on renewing if offered so will try and put it off till the end of contract while I look for something else. The warchest is still being built up so don't want walk away unless I have to.

Is it just you or everyone including other contractors? If you're up in 2 months maybe they're trying to appraise whether to extend or not? Can't imagine why they want to set objectives with 2 months to go..

[Acme Thunderer]

Thanks for the advice - fits with what I had been thinking.

Contract is due up in 2 months and I'm not that keen on renewing if offered so will try and put it off till the end of contract while I look for something else. The warchest is still being built up so don't want walk away unless I have to.

[Wanderer]

They want me to take part in setting objectives/performance appraisal. From what I've read this is a big IR35 red flag as it demonstrates control, so obviously I want to avoid this.

Quite apart from IR35, one of the great things about being a contractor is not having to do these stupid objectives/appraisals. Remind the client that you are a contractor not a permie.

[monobrow]

Appraisal was one of the factors in Dragonfly that counted against the taxpayer. There were a fair few other of course, but it didn't help.

On Control, the case makes clear that where:

•an engagement is to do work allocated as the contract progresses (as opposed to agreed at the outset), that may be capable of amounting to a sufficient degree of 'control-what'

•there is a submission to guidance, or monitoring, or appraisal, that may be capable of amounting to a sufficient degree of 'control-how'

to put the hypothetical relationship between individual and client at risk of being considered to be one of 'employment', for IR35 purposes.

Why Dragonfly got caught by IR35 :: Contractor UK

Thanks Clare, very useful

[Clare@InTouch]

Appraisal was one of the factors in Dragonfly that counted against the taxpayer. There were a fair few other of course, but it didn't help.

On Control, the case makes clear that where:

•an engagement is to do work allocated as the contract progresses (as opposed to agreed at the outset), that may be capable of amounting to a sufficient degree of 'control-what'

•there is a submission to guidance, or monitoring, or appraisal, that may be capable of amounting to a sufficient degree of 'control-how'

to put the hypothetical relationship between individual and client at risk of being considered to be one of 'employment', for IR35 purposes.

Why Dragonfly got caught by IR35 :: Contractor UK

[FarmerPalmer]

appraisal? isn't that the contract renewal process? If the client likes the service that my company provides then they may renew/extend the contract with my company.

[swamp]

Just ignore them. Don't refuse, but just bluff and mumble and tell them you are terribly busy. Eventually they'll give up.

Same strategy works for the infamous opt-out form from agents.

[Pondlife]

If they insist on an appraisal, just send them a customer satisfaction survey to fill in on behalf of your company.