Thoughts to Ponder whilst commuting...

[tractor]

...

What if you (the person) have two companies? Your ClientA insists on an exclusivity clause with YourCompanyA which you agree to, but then when not working for the ClientA via YourCompanyA, you separately contract with ClientB via YourCompanyB.

Exclusivity clause remains intact (YourCompanyA is only working for ClientA and no one else) whilst at another time you (the person) are working for ClientB under a contract that ClientB has with YourCompanyB.

Simples.

Anything that ends in 'simples' usually isn't

I would suggest in the situation you quote, any court that tested it would consider that you should have mentioned the second company during negotiations as it would be material to those discussions. In my original post I should have made it more clear of course I meant to make the distinction between yourco and you. Quite often the clause will state something like 'The company also warrants that the consultant will... blah, blah'

[billybiro]

What the OP described was YOU can only work with US, which is completely different

" So for duration of contract you can't go and gig for another client."

What if you (the person) have two companies? Your ClientA insists on an exclusivity clause with YourCompanyA which you agree to, but then when not working for the ClientA via YourCompanyA, you separately contract with ClientB via YourCompanyB.

Exclusivity clause remains intact (YourCompanyA is only working for ClientA and no one else) whilst at another time you (the person) are working for ClientB under a contract that ClientB has with YourCompanyB.

Simples.

[TheFaQQer]

To celebrate my 1000th post stick in yer thoughts and ponderables (business wise) you had during the dull commute.

I did wonder this morning about would having an exclusivity agreement in your contract by the client put you inside IR35? So for duration of contract you can't go and gig for another client. Could you charge more because of this?


qh

In answer to the second part - if a client was clearly expecting that, I would be charging a premium regardless of any impact on IR35 status.

[quackhandle]

Cheers for the comments, even though my initial question seemed a tad illogical.

qh

[TheFaQQer]

What the OP described was YOU can only work with US, which is completely different

" So for duration of contract you can't go and gig for another client."

I was writing from my perspective, ie. my contracting company will only work with your client company = exclusivity clause.

Which is what you said, just from the client perspective

I've edited the original to make it clearer which perspective I meant.

[tractor]

...

There is a difference between having an exclusivity clause (ie. we will only work with you) and having a non-compete clause (ie. we can work with anyone, but not with your competitors for a given period).

My gut feeling would be that if you have exclusivity, then it's asking for trouble - the client wants you and only you, so the chances of an RoS defence look anorexic. Likewise with a MoO defence - they probably expect to keep you, and will pay you even if there is no work to do. Which only gives D&C to fight the case on.

A non-compete clause would need to be examined closely as well - would HMRC argue that it's essentially the same thing as an exclusivity clause because you haven't got anyone else that could do the work? Probably - but that doesn't mean that it's an argument that they would win. It's probably a much easier one to argue, though - it's a common industry requirement (in certain sectors at least) that you have this kind of restriction.

What the OP described was YOU can only work with US, which is completely different

" So for duration of contract you can't go and gig for another client."

[TheFaQQer]

ISTR that before the 3 pillars of MoO, D & C and RoS were established, exclusivity was perceived to be a potential pointer inside. Hence, around that time people were negotiating non-exclusivity clauses.

I'm not sure how much of a pointer it may be perceived to be nowadays, if at all.

There is a difference between having an exclusivity clause (ie. we [edit: the contractor company] will only work with you [edit: the client]) and having a non-compete clause (ie. we [contractor] can work with anyone, but not with your competitors [the competitors of the client] for a given period).

My gut feeling would be that if you have exclusivity, then it's asking for trouble - the client wants you and only you, so the chances of an RoS defence look anorexic. Likewise with a MoO defence - they probably expect to keep you, and will pay you even if there is no work to do. Which only gives D&C to fight the case on.

A non-compete clause would need to be examined closely as well - would HMRC argue that it's essentially the same thing as an exclusivity clause because you haven't got anyone else that could do the work? Probably - but that doesn't mean that it's an argument that they would win. It's probably a much easier one to argue, though - it's a common industry requirement (in certain sectors at least) that you have this kind of restriction.

[Bunk]

Bearing mind I have never seen this or head anyone mention it is this a realistic situation? Even if it were does it mean you fail any of the three major points of D&C, MoOd and RoS?

You're following the IPSE guide to acronyms there aren't you?

[tractor]

...

Bearing mind I have never seen this or head anyone mention it is this a realistic situation? Even if it were does it mean you fail any of the three major points of D&C, MoOd and RoS?

ISTR that before the 3 pillars of MoO, D & C and RoS were established, exclusivity was perceived to be a potential pointer inside. Hence, around that time people were negotiating non-exclusivity clauses.

I'm not sure how much of a pointer it may be perceived to be nowadays, if at all.

[cojak]

Excuse the ignorance and slight side not; but could you explain what these abbreviations mean?

On the right you'll find CUK Navigation. >>>>>>>>>

Look down and you'll come to the First Timers section. Have a read through there.

[TheFaQQer]

Excuse the ignorance and slight side not; but could you explain what these abbreviations mean?

Direction and Control
Mutuality of Obligation
Right of Substitution

Have a look in the IR35 starter guides over on the right for more details.

[anthony]

Even if it were does it mean you fail any of the three major points of D&C, MoOd and RoS?

Excuse the ignorance and slight side not; but could you explain what these abbreviations mean?

[quackhandle]

Bearing mind I have never seen this or head anyone mention it is this a realistic situation? Even if it were does it mean you fail any of the three major points of D&C, MoOd and RoS?

I concur but what if your clients were directly competing against each other?

qh

[northernladuk]

Bearing mind I have never seen this or head anyone mention it is this a realistic situation? Even if it were does it mean you fail any of the three major points of D&C, MoOd and RoS?

[quackhandle]

To celebrate my 1000th post stick in yer thoughts and ponderables (business wise) you had during the dull commute.

I did wonder this morning about would having an exclusivity agreement in your contract by the client put you inside IR35? So for duration of contract you can't go and gig for another client. Could you charge more because of this?


qh