IR35 - Paid to be on the bench?

[lecyclist]

Full credit for attention to detail OP. But I can't help thinking you'd be better applying your nervous energy to something else.

[pr1]

You are astute, I'll give you that.

Chance of IR35 investigation ~1 in 1000 (probably even less for a foreign client)
Chance of QDOS/IPSE losing an investigation ~1 in 1000 (anecdotally I believe they've lost only a handful of over 4000 investigations/cases between them)
Chance of QDOS TLC35 not paying out after losing an investigation, given it would be their first opportunity to demonstrate and advertise that they will ~ 1 in 100?

Getting down to some pretty small numbers, but you're willing to throw away hundreds/thousands of pounds of guaranteed income "just in case" ?! Play the odds!

[Antman]

Sounds like you're thinking like a scared permitractor who deep down believes they should have been inside IR35 all along, rather than a business person trying to maximise profits for their business - which is fair enough, each to their own

You are astute, I'll give you that.

[BlasterBates]

What would it say in the contract? In the unlikely event that HMRC would conduct an IR35 investigation they will only be able to check the contract and interview you.

I wouldn't turn down the offer of income. You can work on the project, which hasn't yet been approved.

[pr1]

Yeah, looks enticing however I'm not sure that the revenue would see it the same way. Mutuality of Obligation and all that.

Sounds like you're thinking like a scared permitractor who deep down believes they should have been inside IR35 all along, rather than a business person trying to maximise profits for their business - which is fair enough, each to their own

[Antman]

Your client is offering to pay a 100% rate retainer and people on here are trying to talk you out of accepting it? I'd be snapping their hand off (then double bubble for other clients in the meantime)

Yeah, looks enticing however I'm not sure that the revenue would see it the same way. Mutuality of Obligation and all that.

[pr1]

Your client is offering to pay a 100% rate retainer and people on here are trying to talk you out of accepting it? I'd be snapping their hand off (then double bubble for other clients in the meantime)

[ladymuck]

Maybe you could still invoice but agree that you won't invoice every day when you're reassigned? Rather than then work for free until it's all 'paid off' you could work 5 days but invoice 3, depending on the duration of bench time and the renewal? You end up with the same net amout of income, the client ends up withe same net amout of expenditure but it's smoothed out from your perspective. If they decide not to put you onto another project, that's their loss.

Or maybe it's all being way overthought and you should just say, thanks very much, as it's a foreign client.

[Antman]

The furlough thing was an aside. I didn't realise yours was an Irish client.

There's some guidance here but it's worth doing a bit of digging to see how it could work in your situation. You'd need a new / amended contract.

Charging clients a retainer – how various charging models can work for you

Thanks for this, looks complicated and probably doesn't apply in my case. The easiest would be to not invoice for this period at the start, but if this drags on?

I'm aware that although an inconvenience for client, my invoicing wouldn't speed-up a project start date with their end-client. But if I wasn't invoicing then they could decide to put me on the second or third project in their pipeline as they have nothing pushing them to reduce a cost. If that makes sense.

[ladymuck]

Yes, fair lady, the retainer bit sounds all grown-up and business-like to me. Would it work and how to do it?

I wouldn't have thought that furlough comes into their thinking for a company based in Ireland?

The furlough thing was an aside. I didn't realise yours was an Irish client.

There's some guidance here but it's worth doing a bit of digging to see how it could work in your situation. You'd need a new / amended contract.

Charging clients a retainer – how various charging models can work for you

[Antman]

How about you negotiate a retainer, at a reduced day rate, for the period you are not working?

I don't know how that stacks up in IR35 terms but it's a different arrangement to what a permie would get (although all this furlough malarkey of 80% scuppers it somewhat).

I'd be very concerned about being paid by a client to do nothing, when they know you're doing nothing (different from billing while posting on CUK).

Yes, fair lady, the retainer bit sounds all grown-up and business-like to me. Would it work and how to do it?

I wouldn't have thought that furlough comes into their thinking for a company based in Ireland?

[Antman]

Remove IR35 and Covid from your thinking.

If you were sat on site and they were happy to be paying you would you be concerned?

I don't get it, removing IR35 from my thinking "Would I be concerned to be getting paid for doing nothing?" - answer No. I wouldn't be planning my retirement there either, it's expensive for their business model so it most likely wouldn't happen for a long time.

It's the MoO that it creates which would put me inside for the rest of the contract which is what I want to find out how to mitigate.

[ladymuck]

How about you negotiate a retainer, at a reduced day rate, for the period you are not working?

I don't know how that stacks up in IR35 terms but it's a different arrangement to what a permie would get (although all this furlough malarkey of 80% scuppers it somewhat).

I'd be very concerned about being paid by a client to do nothing, when they know you're doing nothing (different from billing while posting on CUK).

[eek]

Remove IR35 and Covid from your thinking.

If you were sat on site and they were happy to be paying you would you be concerned?

[Antman]

Following on from this thread

Coming to an end of current contract with Irish consultancy. They've been happy with me and they have a stack of work in the pipeline which they want to keep me for.

However, they said that they'd renew but that in the first week or two they might not have any work so I'd be on their bench (getting paid, turning up for the odd teams meeting etc.)

So as the client is overseas, it's up to me to determine the status of the contract and this doesn't look like the best way to start it. What would be the best way to handle this aspect of the contract? Tell the consultancy that I'll sign the contract but I won't be invoicing for days on the bench?

That seems like the surest defence however I'm not sure how long I'd be on the bench for, it could be a week, it could be 3 or 4 which starts to have a material impact on me. I'm guessing I need to use some sort of retainer but have never used one before and wouldn't know where to start.

Any help much appreciated.

Thanks,