Reply to: Contracted hours vs being sent home early

[NotAllThere]

That's a bit like saying selling London Bridge to american tourists isn't fraud as they authorised the payment.

No It's not all like that. It's like an American tourist going up to someone who is authorised to sell London Bridge and paying for it.

[VectraMan]

For those who cry "fraud!" who is being defrauded? Not the client - they've authorised the payment. Not the agency.

That's a bit like saying selling London Bridge to american tourists isn't fraud as they authorised the payment.

You lied to get more money for yourself, and if the manager who signed the form knew about it he was complicit in the fraud. I'm not seriously suggesting you'd go to prison or anything, but strictly speaking it is obtaining money through deception. If you put the hours you actually worked on the form and they paid you for the full day anyway then that would be fine. If that's what the client wants then that's what the client should do.

[NotAllThere]

The client is fine, my concern was really two fold:

1. Is it acceptable as a contractor to invoice for hours not worked because the client told you to finish early - does this become less acceptable if it's done on a regular basis rather than as a one-off?

Acceptable to whom?

For those who cry "fraud!" who is being defrauded? Not the client - they've authorised the payment. Not the agency.

I had one client who signed off 40 hours regardless of how many worked. His view was the I was providing at least 40 hours worth of work.

I can see the IR35 caution. You could ask the client if you can just bill for hours worked. And then if you have to work 42.5 hour weeks at some time you'll bill that. Or the client may view the 40 hours as a guideline and really be focusing on the PWD.

[Qdos Contractor]

The client is fine, my concern was really two fold:

1. Is it acceptable as a contractor to invoice for hours not worked because the client told you to finish early - does this become less acceptable if it's done on a regular basis rather than as a one-off?

2. If the contract states 40 hours and the client is regularly telling permies AND contractors to leave early thus making it a 37.5 hours week, are working practices not trumping the contract and thus making it an IR35 issue?

Hi murder1,

On the IR35 front, how important this is to you very much depends on how strong the other key tests are. Can you provide a substitute? Are you under control of your end client? Is there a mutuality of obligation?
If these are strong in both contract AND working practices, then it is of less relevance.
That being said, discrepancies between contract and reality can lead HMRC to question the validity of your entire contract, so how sure are you that your end client can confirm your working practices as being outside IR35? i.e. that you could provide a substitute etc.
It is best not to give HMRC a reason to lengthen out an enquiry or deem you inside IR35, meaning you would either have to fight them or pay the demand, however the 3 key tests are far more important in determining your status.

Although a 40 hour working week is stipulated, ideally there should be some flexibility regarding when those hours are actually completed rather than working 9-5 (for example each day.) In my opinion, leaving early as instructed by the client won’t necessarily help in setting you apart from employees, because whilst you are being instructed to do so by the end client, you’re also being paid when you haven’t actually provided any services (albeit for 2.5 hours). If the 3 tests are evident though, this is unlikely to be of huge significance.

Hope that helps!

-Gemma

[FrontEnder]

It's a day rate but they've stipulated a 40 hour week in the contract rather than just stating "professional working day".

I think I'll be working 40 hours and billing 40 hours - I just want an easy life

This is probably the best thing to do, if this means you're doing a little more than everyone else, it will only help with securing that extension.

[FrontEnder]

You could argue that it's fraud.

That's why I asked if he's making up the hours on other days. I think it would be a stretch to argue fraud if you've done more on one day and less on another, but put the time down as a full day for each. I'd personally clarify that this is acceptable with the client first though, which is exactly what I've done on my current gig.

Being paid for work you didn't do is a major flag is it not? If the whole office is closing, or there's a power cut, then you don't bill for the time you didn't work.

This is why I'd much rather have a day rate because then you can be flexible and that's better for both sides. If you're going to bill per hour then you really ought to do the hours.

I thought he was on a day rate though? A day rate that specifies number of hours, which is a little unusual.

My current contract says a day is min 7.5 hours. After a few weeks of doing full days (including when I travel) I asked if it was ok to do more during the week and less on travel days, but put a full day on the timesheet (more than a full day just meant I got a full day, but less meant that I got paid less). they were happy, so I sent an email to them confirming it all so there's a record.

[LondonManc]

It's a day rate but they've stipulated a 40 hour week in the contract rather than just stating "professional working day".

I think I'll be working 40 hours and billing 40 hours - I just want an easy life

It sounds like the old "Poets day" where factories would do 9 hours Monday to Thursday and finish at one on a Friday, but half hours instead of hours.

[Murder1]

It's a day rate but they've stipulated a 40 hour week in the contract rather than just stating "professional working day".

I think I'll be working 40 hours and billing 40 hours - I just want an easy life

[LondonManc]

You could argue that it's fraud.



Being paid for work you didn't do is a major flag is it not? If the whole office is closing, or there's a power cut, then you don't bill for the time you didn't work.

This is why I'd much rather have a day rate because then you can be flexible and that's better for both sides. If you're going to bill per hour then you really ought to do the hours.

If it was per hour, I'd raise it. On a day rate, some firms specify a minimum hours to achieve a day's billing.

[VectraMan]

If the client is happy to approve the hours you enter on the timesheet, I don't see an issue. Do you work more than 8 hours on other days? Most of my clients have been happy to allow some flexibility.

You could argue that it's fraud.

It might be a minor flag, but I wouldn't worry about it too much, as long as the rest of your house is in order. If the whole office is closing then there's not a lot you can do about it is there?

Being paid for work you didn't do is a major flag is it not? If the whole office is closing, or there's a power cut, then you don't bill for the time you didn't work.

This is why I'd much rather have a day rate because then you can be flexible and that's better for both sides. If you're going to bill per hour then you really ought to do the hours.

[FrontEnder]

The client is fine, my concern was really two fold:

1. Is it acceptable as a contractor to invoice for hours not worked because the client told you to finish early - does this become less acceptable if it's done on a regular basis rather than as a one-off?

If the client is happy to approve the hours you enter on the timesheet, I don't see an issue. Do you work more than 8 hours on other days? Most of my clients have been happy to allow some flexibility.

2. If the contract states 40 hours and the client is regularly telling permies AND contractors to leave early thus making it a 37.5 hours week, are working practices not trumping the contract and thus making it an IR35 issue?

It might be a minor flag, but I wouldn't worry about it too much, as long as the rest of your house is in order. If the whole office is closing then there's not a lot you can do about it is there?

[kaiser78]

The client is fine, my concern was really two fold:

1. Is it acceptable as a contractor to invoice for hours not worked because the client told you to finish early - does this become less acceptable if it's done on a regular basis rather than as a one-off?

2. If the contract states 40 hours and the client is regularly telling permies AND contractors to leave early thus making it a 37.5 hours week, are working practices not trumping the contract and thus making it an IR35 issue?

But you don't have to finish early if you wish to maintain the permie/contractor distance, which may be the better way to go.

[Murder1]

Where's the issue? Is the client unhappy?

Acceptable to whom?

The client is fine, my concern was really two fold:

1. Is it acceptable as a contractor to invoice for hours not worked because the client told you to finish early - does this become less acceptable if it's done on a regular basis rather than as a one-off?

2. If the contract states 40 hours and the client is regularly telling permies AND contractors to leave early thus making it a 37.5 hours week, are working practices not trumping the contract and thus making it an IR35 issue?

[NotAllThere]

I've hit upon an interesting scenario that I think presents an issue.

Client has 40 hour week stipulated in all contracts, however all being well at the end of the week (which is most cases) they allow people to leave 2.5 hours earlier than normal thus contractors are leaving having only done 37.5 hours but invoicing for 5 full days.

Where's the issue? Is the client unhappy?

Is this acceptable as it's the client who's instructed them to finish early? Or should the contractor work the remaining 2.5 hours to fulfil the contract and differentiate themselves from the employees?

Acceptable to whom?

[Murder1]

Sounds like working practices will trump contract.

Hence my eagerness to differentiate myself around this topic by offering to either work the additional hours regardless or work them across the week so I'm being treated differently.