Reply to: 3 mth extensions

[cojak]

27 working days left... (and no-one's bothered to ask me if I want to extend yet. Maybe they're not going to offer but somehow I doubt it... )

[expat]

11 months at one place is more than enough for me.

Hear! Hear!

[boxman]

cheers for all the comments guys!

I've decided to walk after the current contract expires (mid Feb) as I've had enough of the client and I feel I've come to a natural conclusion.

Now I have the difficult decision as to which prospect to progress

[boredsenseless]

Denny: You usualy make a lot of sense, but to me the above is wrong.
I am in business. My rate is calculated on a number of things. These things change according to the length of contract. There are always startup costs, short term travel arrangements are more expensive than long term, same with accomodation. These are all costs that I need to factor in.
I also feel that offering discounts for long term customers is good business.
It has nothing to do with IR35 status, it is a business decision.
My rate or quote takes the whole job into account.

You will find that other businesses do the same. Ask a plumber to come out at short notice for a couple of hours and he has a minimum charge. Ask him to re-plumb your house and his rate changes drastically.

This is one of the problems of IR35. Interpretation of activity can give different understanding of status depending on your original viewpoint.

I agree on the idea of discounting for long-standing customers, but I do it differently I agree a contract that states the first x days of the contract will be performed at £Y and the remainder ay £Y-10% this means that the customer only gets the benefit if they actually convert into being a long term customer

[lukemg]

I am snagged by the 11 months rule, which is a joke really because anyone who was contracting before it was brought in - can stay as long as they want - WTF ?
Also, they are only doing 3 month renewals, doesn't bother me that one (see above).
Looks like a blanket approach to cure a problem they haven't analysed properly. PM's, SDM's etc hate it as they are constantly having to bring new people up to speed and losing knowledge out of the door.

[The Lone Gunman]

If you want to stay outside IR35 I would NOT do this. Otherwise, you too are putting a premium on length of service. You could however justify a rate hike if you admit that the IR35 situation is the reason behind it (which would be justifiable as you would pay a lot more tax and this needs to be covered).

Otherwise, the only thing that should govern your rate is the type of work needed the resources you need to have in place to produce it on time to the required standard and it's intrinsic value to the project. How long you spend on the work or whether you will be offered more in the future is straying into dangerous territory and has no bearing on this at all as you are effectively putting a gun to the heads of clients by stipulating - no security therefore more money. The point of contracting is that there is no security anyway so there shouldn't be an additional charge as if you're implying they are denying you something that you need compensating for.

Denny: You usualy make a lot of sense, but to me the above is wrong.
I am in business. My rate is calculated on a number of things. These things change according to the length of contract. There are always startup costs, short term travel arrangements are more expensive than long term, same with accomodation. These are all costs that I need to factor in.
I also feel that offering discounts for long term customers is good business.
It has nothing to do with IR35 status, it is a business decision.
My rate or quote takes the whole job into account.

You will find that other businesses do the same. Ask a plumber to come out at short notice for a couple of hours and he has a minimum charge. Ask him to re-plumb your house and his rate changes drastically.

This is one of the problems of IR35. Interpretation of activity can give different understanding of status depending on your original viewpoint.

[rootsnall]

As was pointed out before, HR make stupid rules and it doesn't matter what you say, they will not change them. I hit exactly the same thing at GSK - Astra Zeneca have an 11 month rule - I suspect that they will only do little projects from now on.

I think they had issues at AZ with long term contractors ( many years ! ) claiming the rights of employees when they got the flick. I believe some of them won payouts but have never heard the full story. 11 months at one place is more than enough for me.

[bobhope]

Count yourself lucky with 3 months. I'm on a 12 month and psychologically, it's really demoralising knowing that the next 'get out' is so far away.

Plus 3 months have a higher rate.

[boxman]

Agreed. This is exactly my approach.

[TheFaQQer]

Reciprocate - due to Cable and Wireless precedent concerns, a three month contract includes an additional premium of 20%.

If there is a market for the skills out there, and you're not fussed about staying, then why waste time with a three month extension?

[boxman]

Thanks Denny.

Fair point but it's simpler than that I suspect. They don't know whether you're inside IR35 or not because frankly HMRC assume you are until you fight your corner and prove to them that you are IBOYOA.

I work the hours I want to without direction onsite and at home simply ensuring deliverables are met on time. I also have around 40 private clients that I intermingle with contract work gained over the past 10 years. I'm going to be a long way down the list of possible HMRC targets and besides which I take close to a market salary so they'll have bigger fish to fry with a far greater potential tax take.

By drawing up a simple policy like "no one can stay longer than 11 months" or something easy to follow then they won't get themselves too confused (bless 'em).

[boxman]

Cheers Guys. Sounds like as usual it's the big PLCs leading the charge to stop the business doing anything just in case something happens. As no-one I've ever met in HR ever knew anything about the business they were in let alone running a business this isn't a surprise.

I agree that B2B contracts are the only way to go but I also agree that HR will never choose to understand this. 3 month contracts also means negotiations start for a possible renewal after about 6 weeks where I am now and it is seriously painful.

More importantly I'm considering the skillset and marketability issues higher than the term or even the money. No point taking a renewal if you're going to fall behind on skills only to find the next contract that much harder to get!

[HankWangford]

As was pointed out before, HR make stupid rules and it doesn't matter what you say, they will not change them. I hit exactly the same thing at GSK - Astra Zeneca have an 11 month rule - I suspect that they will only do little projects from now on.

as advised before tell em 3 months is more expensive than 6, whereas 12 months comes with a special double discount!!!

[BoredBloke]

As was pointed out before, HR make stupid rules and it doesn't matter what you say, they will not change them. I hit exactly the same thing at GSK - Astra Zeneca have an 11 month rule - I suspect that they will only do little projects from now on.

[The Lone Gunman]

Gently point out to them that the length of contract makes no difference to employment status.

I would also suggest that you point out to them that your rate for 3 months is much much higher than your rate for 6 or 12 months (particularly if you have other offers you are willing to take).