Reply to: Contract Termination - Client no longer requires, for any reason, Company Services

[billybiro]

It can. But they will pay your notice period. Which is typically 3 months nowadays.

Yes, but "probation" periods are getting longer and longer and it's not uncommon to see probation periods of 6 - 12 months these days.

Why is this relevant? Because your notice period is usually no longer than 1 week, and sometimes as short as "immediately" during the probation period.

So, if you do get paid for notice not worked when the employer gets rid of you, you're getting paid a very small sum of money indeed (if indeed anything at all). OP was correct when he insinuated that being a permie (at least for the first few years / the length of the probation period) is really no "safer" than being a contractor.

[TonyF]

I met a guy once that landed an IR35 investigation 3 months into his first contract with almost no war chest and no insurance to cover accountants fees... He regretted it quite a bit.

After only three months, it shouldn't have made any difference. Unless he was paying dividends from the profit that had been retained in the three months, which is always a risky proposition since there is no guarantee that that profiut will be there at the end of the year.

I don't believe this story for one second. How much could he have paid in dividends by that stage? Why wouldn't he just move to paying salary or putting money into a pension? With only twelve weeks worth of work (and maybe only having received payment for eight of those, depending on invoice and payment cycle) there just wouldn't be enough to warrent not declaring yourself inside IR35 as soon as the investigation starts and leaving the contract for something else.

[pr1]

I met a guy once that landed an IR35 investigation 3 months into his first contract with almost no war chest and no insurance to cover accountants fees... He regretted it quite a bit.

You shouldn't be. Don't underestimate them.

It's the guy that's been in a contract for 6 years that should be worried... 3 months is nothing

Also, not sure how they would even know who he is in the first 3 months? Did he royally f##k up his first VAT return or something? Very close to calling bs!

[pauldee]

I met a guy once that landed an IR35 investigation 3 months into his first contract with almost no war chest and no insurance to cover accountants fees... He regretted it quite a bit.

How much difference could there be in 3 months between being in and out of IR35?

[northernladuk]

That’s a bit tulip.

But at least his liabilities would be tiny having only 3 months worth of billing.

Surprised HMRC would even bother.

You shouldn't be. Don't underestimate them.

[MrButton]

I met a guy once that landed an IR35 investigation 3 months into his first contract with almost no war chest and no insurance to cover accountants fees... He regretted it quite a bit.

That’s a bit tulip.

But at least his liabilities would be tiny having only 3 months worth of billing.

Surprised HMRC would even bother.

[Snarf]

I have never met anyone that regretted trying to get into contracting.

I met a guy once that landed an IR35 investigation 3 months into his first contract with almost no war chest and no insurance to cover accountants fees... He regretted it quite a bit.

[northernladyuk]

Um me? With my school peers hitting CxOs of investment banks & FTSE companies I very much regret it in retrospect. I had an absolute blast from 93-00 but since the PWD was introduced....

A conversation with a techy who used to sit next to me over for dinner last week who quit his employer after 14 months because he had maxed out his accelerator at GBP 1M in 2017 to be snapped up by a rival who did not cap was a solid dose of reality. (Longest sentence ever but can't be arsed to grammer)

Did I regret in in my 20s & 30s - oh no. This is probably a passing phase. I haven't done office politics in 2 decades. Contracting after 40 in the current market is a different concept however. Luckily I just mortgaged my soul for some cars so I can go bankrupt and contract for Yodel.

What kind of hours have your school peers been putting in?

[PermieToContractorAndBack]

No employment protection for the first two years. If you factor in holiday and possible sick pay into your day rate, then apart from a 3% contribution to your pension I don't see any advantage in being permie anymore.

There is no employee protection beyond 2 years either, my sister's boyfriend never had his redundancy money paid because the company pretended to re-employ him.

Companies set budget and headcount aside for permanent staff, it is usually in management's interest to keep the number of staff because building up the headcount is difficult, politically. Permanent teams also usually have a better established reason to exist.

You get sick pay, you get paid holiday, you get maternity leave, you get paid notice period, you get a proper interview process where, if you are smart, you can assess the likelihood of a career.
You have HR protection against bullying, various forms of discrimination unless you are guilty of gross misconduct.

The only thing you can't do is take the company to court - which most people don't.

As a contractor, you have no form of protection at all, most of the time you have no way of telling what you are getting yourself into - in terms of feasibility of the project - until you start working there. No HR protection, you are the first person to get dumped if it starts going pear shaped.
Good projects go to permie staff first, there is no career progression, there is no headcount planning because contractors are seen as disposable resource. There is no training.

A good contract is also harder to get than a good permie job because you can't work your way up.

[pauldee]

No employment protection for the first two years. If you factor in holiday and possible sick pay into your day rate, then apart from a 3% contribution to your pension I don't see any advantage in being permie anymore.

[PermieToContractorAndBack]

All you experienced contractors please be aware that this can happen to a perm in the first two years of work

So stop coming out with all the risks you take to warrant an increased day rate....

It happened to me after 4 years and 8 months with a company. The difference is, I got a payoff the equivalent of 6 months gross salary tax free plus my notice period.

Most contracts will stipulate that you have to be paid or given a notice period - as someone else said - if you get it past the first month or probation. In my last permie role there was no probation, it went permanent straight away.
They also had a pension scheme for every pound I paid in for up to 5% of my gross salary, they paid in 2.

With permie roles you also have a proper interview process and the company invests in you, there is HR protection.

Nowhere near the same ballpark

[MrButton]

All you experienced contractors please be aware that this can happen to a perm in the first two years of work

So stop coming out with all the risks you take to warrant an increased day rate....

It can. But they will pay your notice period. Which is typically 3 months nowadays.

[LondonPM1]

All you noobies and lurkers, please read and try and understand this thread before you decide to "gonna give that contracting thing a go"

qh

All you experienced contractors please be aware that this can happen to a perm in the first two years of work

So stop coming out with all the risks you take to warrant an increased day rate....

[quackhandle]

I have never met anyone that regretted trying to get into contracting.

That's because they went back to being permy.

qh

[quackhandle]

Right oh, thanks for the heads up

Post wasn't aimed at you.

qh