Continuing in a role without a contract

[psychocandy]

That is pretty cynical but is an apt demonstration of the risks involved in working with no contract.

If you are offered a verbal extension and you agree then you have entered in to a contract, but as has rightly been pointed out in the event of a dispute a verbal contract will be largely worthless.

You should always get something in writing from the party YourCo has a contractual relationship with. Even a cursory "can you extend for another week" email exchange would help demonstrate a continuation of the existing contractual relationship.

Agree. If client baulks at the suggestion of spending two minutes emailing you saying "yes we would like to extend your contract"
then theres something badly wrong.

[Safe Collections]

Beware of this. Get an email at least from agent and/or client.

I had this once or twice. Client got a bit arsey because I wasn't going to show so I insisted on either an email from them or agent. Suddenly they didnt have time to do this so I told them to call me when they did.

Day or two later it was sorted but found out that a year or so ago they'd shafted another contractor. Worked a week, then said oops sorry we've not got the budget so cant pay you for that week.

That is pretty cynical but is an apt demonstration of the risks involved in working with no contract.

If you are offered a verbal extension and you agree then you have entered in to a contract, but as has rightly been pointed out in the event of a dispute a verbal contract will be largely worthless.

You should always get something in writing from the party YourCo has a contractual relationship with. Even a cursory "can you extend for another week" email exchange would help demonstrate a continuation of the existing contractual relationship.

[TheFaQQer]

So, having been in a contract (with formal contract) for a few months/years but then a renewal isn't formally signed and the client just carries on using your services and you keep billing. Is there an implied contract of services in that case?

As long as there is an agreement, then there is a contract. And that agreement can be made through conduct - see Brogden's case for details.

So if the client continues to use your services, and you continue to provide them without a written contract, then you'd have a reasonably easy time in proving that the contract existed at the time. Where it might be hard is if one party terminates and the other attempts to hold them to a written clause in the previous contract. I'd expect the old terms to apply (after all, that is what is in place that you are both clearly working to), but it might be a harder argument.

[psychocandy]

Beware of this. Get an email at least from agent and/or client.

I had this once or twice. Client got a bit arsey because I wasn't going to show so I insisted on either an email from them or agent. Suddenly they didnt have time to do this so I told them to call me when they did.

Day or two later it was sorted but found out that a year or so ago they'd shafted another contractor. Worked a week, then said oops sorry we've not got the budget so cant pay you for that week.

[psychocandy]

I've been in the situation before where renewals have not come in quick enough and this has meant me working on-site for a few days here and there out-of-contract. Never had any problem being paid etc. but I do wonder what the situation would be if the contractor is working like this for an extended time, several months even.

So, having been in a contract (with formal contract) for a few months/years but then a renewal isn't formally signed and the client just carries on using your services and you keep billing. Is there an implied contract of services in that case?

For example -
Is there actually is any risk to the contractor, assuming that the work is getting done and that the Ltd Co is still being paid for any invoices raised?
Is there any greater (or reduced) IR35 risk?
Can the client come back later in time and try to claim back invoice payments?

No!!!!!!!!!!!!!!!!!!!!!!!!!!

Dont do it!!!!!!!!!!!!!!!!

[jamesbrown]

No issues for a few days, as the earlier T&C apply (assuming you haven't verbally agreed to different ones). That being said, I'd still want a Purchase Order with (as a minimum) a rudimentary outline of the services being provided. Beyond a few days, the risk here isn't IR35, although it does look a little un-commercial TBH, it's more about the general flakiness of the situation, especially in the event of disagreement.

[northernladuk]

You have to be careful working no contract. Verbal is very difficult to prove and defend. Working without one could indicate you are part and parcel. The JLJ case lost because he became part and parcel and was paying lipservice to the paperwork. Extended working without a contract could look the same.

[SueEllen]

I suppose if you continue working after a contract ends, and they keep paying you, it would be a lot easier for HMRC to argue there is mutuality of obligation, and a lot harder for you to argue there isn't.

Oddly a barrister's opinion from this site indicates it's not whether the contract is written or unwritten but the number of "one off" contracts.

In other words you need a schedule even if it's an email between both parties stating what piece of work should be done in that period or whether they will pay for you to complete a piece of work.

[WordIsBond]

The contract is a verbal agreement.

Yes, and one that hasn't been reviewed, and one that you can't prove is IR35 appropriate.

It just means when the client is interviewed by HMRC they have to be more on the ball.

It's always a good idea to increase your exposure to a huge tax hit if, 3-4 years from now, your client isn't "on the ball" in protecting you. The people with whom you've entered this verbal agreement may not even be around by the time the tax man comes asking questions.

[SueEllen]

I suppose if you continue working after a contract ends, and they keep paying you, it would be a lot easier for HMRC to argue there is mutuality of obligation, and a lot harder for you to argue there isn't.

Nope.

The contract is a verbal agreement.

Under English law verbal contracts are legal.

It just means when the client is interviewed by HMRC they have to be more on the ball.

[WordIsBond]

Is there any greater (or reduced) IR35 risk?

I suppose if you continue working after a contract ends, and they keep paying you, it would be a lot easier for HMRC to argue there is mutuality of obligation, and a lot harder for you to argue there isn't.

[SueEllen]

It makes no difference to IR35.

If your client and agency regularly send the paperwork out late then it's not an issue as under English and Welsh law you have a verbally agreed contract. They also have set a precedent in working this way.

The issues arise if the terms of your contract require changing.

[ChimpMaster]

I've been in the situation before where renewals have not come in quick enough and this has meant me working on-site for a few days here and there out-of-contract. Never had any problem being paid etc. but I do wonder what the situation would be if the contractor is working like this for an extended time, several months even.

So, having been in a contract (with formal contract) for a few months/years but then a renewal isn't formally signed and the client just carries on using your services and you keep billing. Is there an implied contract of services in that case?

For example -
Is there actually is any risk to the contractor, assuming that the work is getting done and that the Ltd Co is still being paid for any invoices raised?
Is there any greater (or reduced) IR35 risk?
Can the client come back later in time and try to claim back invoice payments?