Reply to: Contract and training

[mike67]

Assuming you are working outside IR35, this is from the "part and parcel of the organisation" bit of IR35. The argument is that if the client pays for your training, they are treating you like an employee where they would do so. If your company is providing a professional service, you should be responsible for training "your staff" (ie yourself). It is a pretty weak element of the IR35 assessment (and for the public sector I don't think it is in the HMRC tool at all) but is often put in to "IR35 friendly" contracts for your benefit. You could perhaps have the best of both worlds in the contract if you asked them to change it to say "unless specifically agreed with the client", ie "usually" you would pay for all training (to establish yourself as in a genuine business to business relationship for IR35 purposes) but then agree with the client that on this specific occasion they would fund the training.

[northernladuk]

Azure or cloud stuff is pretty fundamental to many working with apps, operating systems, PMs and the such so is fine for many. Newbies entering the IT market and anyone wanting the training to change skill sets then it's questionable.

It would depend if what you are learning linked to your skill or knowledge to start selling something you can't. Better to take it on a case by case basis than a generalism if you want a definitive answer.

[perplexed]

If the client is wanting you to get training in something like Azure (or some other cloud) then I'd be all for it. These are hugely transferable and currently very valuable skills to have and I'd be quite happy to pay for it.

(Assuming you don't already have the requisite skills in this area, of course).

My memory might be failing but isn't there an issue with regards to training as to if the skills gained are needed for a *specific* role as opposed to being applicable for *general* roles?

ClientCo may have proprietary stuff you need to learn to provide services to them whereas something like Azure skills can be applied to numerous different client engagements?

[billybiro]

Another example I've seen is where the client is bringing in new tech like Azure. A number of courses are provided from show and tell's to hands on. Some have a cost code. Will they try charge the contractor to attend this?

If the client is wanting you to get training in something like Azure (or some other cloud) then I'd be all for it. These are hugely transferable and currently very valuable skills to have and I'd be quite happy to pay for it.

(Assuming you don't already have the requisite skills in this area, of course).

[perplexed]

It's possible. I've made it clear to the agent and the end client that there is on the job learning. But they could say you need a two week course, pay for it.

They could say you need to skill up in this tech ASAP. The tech knowledge is needed for you to provide requested services to the client. How you obtain those skills is up to you.

[l35kee]

In all reality it's there to target the IR35 issue. I wouldn't be turning down a contract for the sake of this not being removed...... If (a big if) they do offer you training, just turn it down.

[woohoo]

One thing that does strike me though is internal training or awareness courses. You can't buy them on the open market but they often have an internal cost.

For example the client uses SAP HR and there is a half day course for managers. Your client managers cost code would be charge £45 quid to attend this. What is the score here? Will the client try and charge you for the £45 or do they not consider internal training like this as part of that clause.

Another example I've seen is where the client is bringing in new tech like Azure. A number of courses are provided from show and tell's to hands on. Some have a cost code. Will they try charge the contractor to attend this?

Good point, I'm going to ask for the clause to be removed. The agent seems on the ball and seems motivated. If it's an issue not too bothered about turning down the contract.

[northernladuk]

One thing that does strike me though is internal training or awareness courses. You can't buy them on the open market but they often have an internal cost.

For example the client uses SAP HR and there is a half day course for managers. Your client managers cost code would be charge £45 quid to attend this. What is the score here? Will the client try and charge you for the £45 or do they not consider internal training like this as part of that clause.

Another example I've seen is where the client is bringing in new tech like Azure. A number of courses are provided from show and tell's to hands on. Some have a cost code. Will they try charge the contractor to attend this?

[psychocandy]

Hmmm. Depends what it means. If client says "you need to learn this" then fair enough I'll but the book for £30.

If they say, all the permies are off on this course and we want you to pay for yourself. £2000+ hotel. Ummm no way.

[MrMarkyMark]

+1. Why would I willingly pay for a course for a technology I (in all likelihood) would never use again....

That is up to you .

As I said, its the one way your LTD can properly take advantage of the tax break for training.
It has to be needed to perform services as per a live contract for a tax break to apply.

Getting the client to pay could be seen as an IR35 pointer, IMO.

[eek]

I agree with you it's probably nothing to worry about. Not sure I agree with your logic about being in a contract and new tech is introduced. I would negotiate with the client about paying for the course.

+1. Why would I willingly pay for a course for a technology I (in all likelihood) would never use again....

[woohoo]

If they know you lack a few skills in a core tech, they may have put this in to protect themselves?
.

It's possible. I've made it clear to the agent and the end client that there is on the job learning. But they could say you need a two week course, pay for it.

[woohoo]

I've seen something similar before. I was quite happy for it to be in and I don't remember QDOS picking it up. If a new tech comes in and all the perms have to go on a training course for it you wouldn't expect to be sent on it with them. Up to us to have the skills to be able to sell back to the client.

You could argue it's a pointer to outside but it's pretty minor tbh. I'd say someone was just being a bit overly cautious when writing the contract.

so that clause directly addresses this.

I agree with you it's probably nothing to worry about. Not sure I agree with your logic about being in a contract and new tech is introduced. I would negotiate with the client about paying for the course.

[northernladuk]

I've seen something similar before. I was quite happy for it to be in and I don't remember QDOS picking it up. If a new tech comes in and all the perms have to go on a training course for it you wouldn't expect to be sent on it with them. Up to us to have the skills to be able to sell back to the client.

You could argue it's a pointer to outside but it's pretty minor tbh. I'd say someone was just being a bit overly cautious when writing the contract.

Accepting formal training from a client also suggests that the contractor is working within IR35. Large companies would normally invest in training for their employees, and a contractor accepting a ‘free’ training course from a client could attract the attention of HMRC.

so that clause directly addresses this.

[MrMarkyMark]

It's a strange term but I can see the logic - if you need a training course / book you need to pay for it... Still don't like the term being in a contract though so would get it checked out...

I thought that training was only truly available as a tax break for a LTD under this very situation.

i.e. if you need the course or training to perform relevant contracted services it was allowable?

If they know you lack a few skills in a core tech, they may have put this in to protect themselves?
Still, never seen this sort of clause before, either.