Reply to: First Time Contractor Questions

[SueEllen]

As a business you can put anything you like in a business to business contract whether it's enforceable or not is up to a judge.

[theroyale]

"Neither the Contractor nor the Worker shall directly or indirectly supply its services within twelve months of the
conclusion of any Assignment to any Client, subsidiary or third party to whom the Worker has been assigned by the Client,
in respect of which an Assignment has been undertaken."


2. "The Company shall not be obliged to pay any fees to the Contractor unless a signed timesheet has been submitted by the Contractor in accordance with sub clause 4(a) or if the work to which the timesheet relates is in dispute."

Both were on my contract, and bboth are standard clauses afaik.

[northernladuk]

Dear all,
I am feeling frustrated as I received a call from the client that it will take them long to set-up a new supplier on their system and they won't be able to arrange hardware etc before I start this week. Now they want me to go through one of their agency

If this part of the process is getting you mad already you are in the wrong industry and need to go find a nice cushy permie role imo...

The whole thing just spolied my day as I was supposed to have a nice day off and these last minute issues keep popping up.

Ah diddums.

Couple of observations which would need your guidance/input:
1/ I think, I may end up going through the agency as I am now even getting a 2 weeks notice period(either party) in this contract. However, I am just dubios about one restriction in the contract that I must work with through the same agency for any future contracts with this client (12 month restriction). And there is another clause in the contract

"Neither the Contractor nor the Worker shall directly or indirectly supply its services within twelve months of the
conclusion of any Assignment to any Client, subsidiary or third party to whom the Worker has been assigned by the Client,
in respect of which an Assignment has been undertaken."

This is standard. 6 months is more normal,. Do some searching on here as this gets asked a lot and some of the others may have better wording you could put forward instead.

[quote]
2. "The Company shall not be obliged to pay any fees to the Contractor unless a signed timesheet has been submitted by the Contractor in accordance with sub clause 4(a) or if the work to which the timesheet relates is in dispute."

If the timesheet has been signed by the client, I don't see a point of having any dispute for that timesheet. Am I being pedantic or it's just badly written clause?

[quote]
You are being pedantic. Your boss might sign your timesheet for being in the office but what you deliver may look like it was done in half the time so they will query your time spent. Keep your nose clean and it wont be a problem.

If, by any chance, there is a step in the process of you getting a contract that you might actually have completed by yourself then feel free to tell us so we can see things are progressing....

[Wanderer]

I am feeling frustrated as I received a call from the client that it will take them long to set-up a new supplier on their system and they won't be able to arrange hardware etc before I start this week. Now they want me to go through one of their agency

The whole thing just spolied my day as I was supposed to have a nice day off and these last minute issues keep popping up.

Yeah, that's the way it goes sometimes. I'm in the same situation, got a job direct, forced to use an agency which adds no value and just annoys everyone with their stupid tricks.

Welcome to contracting. You get this type of stuff from time to time (not often to be fair) and you've got to roll with it or go back to being a permie.

1/ "Neither the Contractor nor the Worker shall directly or indirectly supply its services within twelve months of the
conclusion of any Assignment to any Client, subsidiary or third party to whom the Worker has been assigned by the Client,
in respect of which an Assignment has been undertaken."

2. "The Company shall not be obliged to pay any fees to the Contractor unless a signed timesheet has been submitted by the Contractor in accordance with sub clause 4(a) or if the work to which the timesheet relates is in dispute."

If the timesheet has been signed by the client, I don't see a point of having any dispute for that timesheet. Am I being pedantic or it's just badly written clause?

3. What is optout form for the agency conduct? Are there any implications for the contractor if they opt-out? I guess, the simple thing would be to know the best approach in this case.

They try this stupid trick on with everyone. The Opt-Out mentioned in section 3 allows them to put the nasty restrictions in section 1 and 2 into your contract. DO NOT sign the opt out form, tell them that you will "do nothing" with regard to opt out. This will invalidate section 1 and 2, though they won't tell you that.

Show them the original contract offered by the company and tell them you want one IR35 proof like that one was. They then scream and wail and send "But that's our standard contact! EVERONE uses that one!". (bulltulip). They then give you another 100 page contract to review (but won't tell you what changed).

Stick with it, once it's setup you are OK and hopefully you are getting a decent rate to compensate you for all this messing about.

[mudskipper]

If you search 'opt out', you'll find that in order to opt out you need to do so before being introduced to the client. In your case, it sounds like it's too late.

[dagenheis]

Dear all,
I am feeling frustrated as I received a call from the client that it will take them long to set-up a new supplier on their system and they won't be able to arrange hardware etc before I start this week. Now they want me to go through one of their agency

There is no effect on my rate etc, but I just did't want do go through an agency. When I spoke to the agency, I have been told about a selection of brollies as follows:

Conduit
Giant
Churchill Knight & Associates Ltd
However, the agency guy understands that it's my prerogative to choose whichever brolly I want to use for these services.
The whole thing just spolied my day as I was supposed to have a nice day off and these last minute issues keep popping up.

Couple of observations which would need your guidance/input:
1/ I think, I may end up going through the agency as I am now even getting a 2 weeks notice period(either party) in this contract. However, I am just dubios about one restriction in the contract that I must work with through the same agency for any future contracts with this client (12 month restriction). And there is another clause in the contract

"Neither the Contractor nor the Worker shall directly or indirectly supply its services within twelve months of the
conclusion of any Assignment to any Client, subsidiary or third party to whom the Worker has been assigned by the Client,
in respect of which an Assignment has been undertaken."

2. "The Company shall not be obliged to pay any fees to the Contractor unless a signed timesheet has been submitted by the Contractor in accordance with sub clause 4(a) or if the work to which the timesheet relates is in dispute."

If the timesheet has been signed by the client, I don't see a point of having any dispute for that timesheet. Am I being pedantic or it's just badly written clause?

3. What is optout form for the agency conduct? Are there any implications for the contractor if they opt-out? I guess, the simple thing would be to know the best approach in this case.

Many thanks.

[LisaContractorUmbrella]

@NorthernladUK: Nobody is saying that the dispensation scales should be abused. However, there is nothing wrong with getting tax relief on claiming "legitimate" expenses that must be supported with valid receipts. I wouldn't recommend anybody to mess around for few quids.

Ok guys, I am finally starting this weeks. Lets hope all goes well and I like this change in work life.
One question:
Do I need to sort out brolly set-up before I start or I can do that within first 2 weeks before my invoice is due?

I have found OrangeGenie quite professional and responsive. I have't found anything negative on the forums either. I may sign up with them. There is no tie-in, joining/exit fee, setup I would only pay when they receive an invoice (110 quid fixed fee from taxes). I hope i don't get surprises, but there is no other cost.

I also spoke to Contractor Umbrella with slightly lower charges (10 quid) than OrangeGenie. The Contractor Umbrella never sent me the personal illustration following the call though. I understand that more than one brolly may be offering the same level of service.

Cheers,

Hi Dagenheis - would you be able to PM me with the details of your enquiry so that I can find out why you did not receive your personal illustration?

[dagenheis]

@NorthernladUK: Nobody is saying that the dispensation scales should be abused. However, there is nothing wrong with getting tax relief on claiming "legitimate" expenses that must be supported with valid receipts. I wouldn't recommend anybody to mess around for few quids.

Ok guys, I am finally starting this weeks. Lets hope all goes well and I like this change in work life.
One question:
Do I need to sort out brolly set-up before I start or I can do that within first 2 weeks before my invoice is due?

I have found OrangeGenie quite professional and responsive. I have't found anything negative on the forums either. I may sign up with them. There is no tie-in, joining/exit fee, setup I would only pay when they receive an invoice (110 quid fixed fee from taxes). I hope i don't get surprises, but there is no other cost.

I also spoke to Contractor Umbrella with slightly lower charges (10 quid) than OrangeGenie. The Contractor Umbrella never sent me the personal illustration following the call though. I understand that more than one brolly may be offering the same level of service.

Cheers,

[northernladuk]

And I don't 6-8 quid for a real lunch is a big deal

I do! For the sake of a couple of quid a day I would not be putting lunch in at this rate for love nor money. My own personal preference is to max it out at a fiver and thats it. Any more and I am quite happy to swallow the difference on the tax of a couple quid than paint a big HMRC Kick Me Here sign on my ass.

Allowable and reasonable are not always the same thing.

[Steven@Parasol]

folks, my understanding is that 9.80£ or 40 pence per mile is the maximum I can claim. I intend to keep my subsistence (lunch) receipts even though I don't need to provide it to my brolly. And I don't 6-8 quid for a real lunch is a big deal although you can get Tuna sanwich for 1.20£.

@Wanderer, I am confused about your last comment that the car maintenance (e.g. service, tyres) are not included but you also mention that maintence insurace etc are included :s
I plan to ask my brolly to send me the list of expenses that can be claimed so that I have a clear idea.

BTW, could you please comment on remaining questions in my last post. It is much appreciated.

I tried to contact Parasol and Springboard, they haven't responded so far. I wanted to compare their prices although SpringBoard is offering me first free contract.

Has anybody recently used OrangeGenie? Is there anything I should get from a brolly before I sign up with them like any referrals, terms etc?

Many thanks

Have a search on here and other forums and you'll get a really good feel for how all the different brollies are viewed by people. The same names do come up a lot for better or worse.

There are also lots of good independent umbrella guides out there too.

A correctly structured umbrella company should provide a complete professional employment service for contractors which will include a full contract of employment, HR support, guaranteed hours of work, invoicing and timesheet management, tax and National Insurance contributions (PAYE and NICs) and statutory HMRC notifications.

A good contractor focused umbrella will also issue invoices on your behalf, collect payments from clients/agencies, calculate tax and NI contributions and pay you your net pay direct to your personal bank account, without holding on to it.

Be wary of claims such as 'HMRC approved' or 'IR35 compliant'. HMRC does not approve or accredit companies so this doesn't actually mean anything. Neither does IR35 compliant in the context of umbrella companies as you will be taxed under normal PAYE as an employee.

Next, make sure you have a clear understanding of each umbrella's fee structure and identify any hidden costs such as a leaving fee. Does the umbrella charge you a fixed monthly or weekly fee or do they charge a percentage of your gross invoice value? What is included in the fee you are paying e.g. does it include professional indemnity or employer liability cover, etc?

Remember, even once you have signed up, if you aren't happy with the services you are receiving you always have the right to leave and move elsewhere.

Oh and if you want to PM me about who you tried to contact at Parasol I can give them a nudge.

[Wanderer]

@Wanderer, I am confused about your last comment that the car maintenance (e.g. service, tyres) are not included but you also mention that maintence insurace etc are included :s

Sorry if it wasn't clear.

If you run a car, you can't claim anything at all for traveling by car expenses except for "40p per mile for the first 10,000 miles in any one year and 25p thereafter" (thanks Lisa) for business trips. This includes commuting from home to work for the first 2 years - see the "Two year rule" for more arcane rules on this.

As for expenses, if you go LTD you've got the The IR35 5% expenses rule where you don't have to provide any receipts or even spend the money. Now of course an umbrella is a completely different structure but surely if Hector is going to let this go for a LTD company then claiming less than 5% expenses (fully receipted and exclusively for business) through a brolly is going to pretty much keep you under Hector's radar?

I think we worry a bit too much about tiny details. Hector is in the numbers game, there are lots of us and a few of them. They will go for the big money and pick on a whole brolly company looking for evidence of systematic abuse, not sit there and suck their teeth arguing the toss over the price of a a tuna sandwich vs a ciabatta....

[LisaContractorUmbrella]

folks, my understanding is that 9.80£ or 40 pence per mile is the maximum I can claim. I intend to keep my subsistence (lunch) receipts even though I don't need to provide it to my brolly. And I don't 6-8 quid for a real lunch is a big deal although you can get Tuna sanwich for 1.20£.

@Wanderer, I am confused about your last comment that the car maintenance (e.g. service, tyres) are not included but you also mention that maintence insurace etc are included :s
I plan to ask my brolly to send me the list of expenses that can be claimed so that I have a clear idea.

BTW, could you please comment on remaining questions in my last post. It is much appreciated.

I tried to contact Parasol and Springboard, they haven't responded so far. I wanted to compare their prices although SpringBoard is offering me first free contract.

Has anybody recently used OrangeGenie? Is there anything I should get from a brolly before I sign up with them like any referrals, terms etc?

Many thanks

With regard to the expenses that you can claim - they are determined by HMR&C and not your brolly. The basic rule is that an expense has to be a cost that you personally have incurred purely because of the contract i.e. money that you wouldn't have to pay out if you weren't doing the contract. Your brolly cannot send you a list of expenses as everybody's circumstances are different. If you are travelling to the contract by car you can claim 40p per mile for the first 10,000 miles in any one year and 25p thereafter; this is designed to cover the running costs of the vehicle. Although as you say £8 per day is not a huge amount for a lunch out the £160+ it adds up to per month would be questioned by HMR&C if you were not incurring that cost - they tend to get upset if you claim £40 per week for subsistence if you are taking a packed lunch to work.

[northernladuk]

Working in London, I could easily spend a tenner a day on lunch.

I agree with northernlad that car maintenance is most probably not allowable unless it's a company car.

What you would do is claim 40p per mile (for the first 10k miles per year, it's less after that). This has to cover maintenance, insurance, fuel, road tax, speeding tickets etc etc.

If you drive a 10 year old Ford Focus diesel then you're probably quids in. If you drive a BMW X5 with petrol V8 then you're going to be out of pocket.

110 is OK if that's monthly.

I was just raising a bit of a warning flag rather than go through all the OP's outgoings. If he thinks car maintenance is allowable a good re-think and re-read of the documentation from his brolly is required. The one I started with had a pretty concise guide of what is and what isn't allowable...
And being even more pedantic I would say even though Wanderer can also joke about spending that I day I am still not sure it will go down well if you are trying to claim that day in day out. Occasioanlly maybe but it is it really worth raising a nice big target for HMRC to hit? I was of the understanding £5 was around the norm. Saying that I don't work in the big smoke so can't say if it is acceptable to raise this.

[dagenheis]

folks, my understanding is that 9.80£ or 40 pence per mile is the maximum I can claim. I intend to keep my subsistence (lunch) receipts even though I don't need to provide it to my brolly. And I don't 6-8 quid for a real lunch is a big deal although you can get Tuna sanwich for 1.20£.

@Wanderer, I am confused about your last comment that the car maintenance (e.g. service, tyres) are not included but you also mention that maintence insurace etc are included :s
I plan to ask my brolly to send me the list of expenses that can be claimed so that I have a clear idea.

BTW, could you please comment on remaining questions in my last post. It is much appreciated.

I tried to contact Parasol and Springboard, they haven't responded so far. I wanted to compare their prices although SpringBoard is offering me first free contract.

Has anybody recently used OrangeGenie? Is there anything I should get from a brolly before I sign up with them like any referrals, terms etc?

Many thanks

[Wanderer]

I don't think car maintencance is a travel expense if it is your own car and 9.50 a day for lunch is a bit isn't it?

Working in London, I could easily spend a tenner a day on lunch.

I agree with northernlad that car maintenance is most probably not allowable unless it's a company car.

What you would do is claim 40p per mile (for the first 10k miles per year, it's less after that). This has to cover maintenance, insurance, fuel, road tax, speeding tickets etc etc.

If you drive a 10 year old Ford Focus diesel then you're probably quids in. If you drive a BMW X5 with petrol V8 then you're going to be out of pocket.

110 is OK if that's monthly.