Reply to: Simple retainer agreement?

[johanek]

So all good in the end! If anybody wants an anonymised copy of the schedule I drew up I'm happy to share it, but it is designed to be used in conjunction with the master service agreement which I'm not going to share as its a PCG template. I'm not sure you can copyright contracts but I feel like if you want it, you should sign up for the PCG.

Sorry to resurrect a rather old thread, but I’m looking to set up a retainer agreement with a client, and the information in this thread and some others has been really useful.

TheCyclingProgrammer, is there any chance you could share the schedule you drew up with me please?

[ChrisR]

I've just been asked by a client for this exact same thing, any chance you can share your anonymised schedule?

[northernladuk]

I do this. Client number two has me on a retainer to support their production system, the contact actually says that I will do 25 hours a week, but it's a use it or loose it arrangement - I normally only do a couple of hours a week. The contract says that for a level 1 production issue I need to jump on a conference call within 30 mins of being informed, but anything else I have 1 week to respond.

Before NLUK jumps on me - I employ two sub-contractors on a small retainer, in the event that I can't get on the conference call due to client one keeping me busy, then they will both do it for me - the first one on the call then gets an hourly rate while they run through standard trouble-shooting steps while I make myself available. (this has never happened and we only get a level 1 incident once every couple of years on average anyway)

Projects at client one are set up separately (such as new code / new hardware etc) and I quote them an eye-watering amount for my part, which they happily sign off

Nice set up.

[tvr450]

I do this. Client number two has me on a retainer to support their production system, the contact actually says that I will do 25 hours a week, but it's a use it or loose it arrangement - I normally only do a couple of hours a week. The contract says that for a level 1 production issue I need to jump on a conference call within 30 mins of being informed, but anything else I have 1 week to respond.

Before NLUK jumps on me - I employ two sub-contractors on a small retainer, in the event that I can't get on the conference call due to client one keeping me busy, then they will both do it for me - the first one on the call then gets an hourly rate while they run through standard trouble-shooting steps while I make myself available. (this has never happened and we only get a level 1 incident once every couple of years on average anyway)

Projects at client two are set up separately (such as new code / new hardware etc) and I quote them an eye-watering amount for my part, which they happily sign off

[PSPhoenix]

ever find one

Did you ever find a retainer template? Sounds like you may have made one yourself. I'm looking for a template myself and only finding US templates online.

[Wanderer]

What they essentially want from me is a commitment for a maximum of 4 days/month which I would presumably bill them for whether they use those days or not - so they are essentially paying for my time whether or not I do any work; in return I keep some time available and make my other clients aware that I require this flexibility (which shouldn't be a problem). A fairly standard retainer agreement.

Depends on the client but it can be nice work if you can get it and they forget that you are there...

[malvolio]

Just for future reference...

[TheCyclingProgrammer]

Just thought I'd provide one last update on this - using my own contract and schedule as a basis, with some ideas gleaned from my client's contract with their client, I was able to draft a schedule agreement that both I and my client were very happy with.

For a belt and braces approach I submitted this over to QDOS for a contract assessment along with one of their working practices questionnaires and it today came back as a pass, with nearly flying colours.

One of the few negative points was the notice period on my side being longer than 30 days (I've actually specified my notice as one full "retainer period" so it could be anywhere from 30-60 days depending on when I give notice). However I felt this seemed like fair notice to me. I've stipulated that the client can terminate at any time with the contract then ending at the end of the retainer period in which they give notice (so their notice period is anywhere from 0-30 days really) - they pay in advance for each month so they get to use it if they've paid (no refunds).

So all good in the end! If anybody wants an anonymised copy of the schedule I drew up I'm happy to share it, but it is designed to be used in conjunction with the master service agreement which I'm not going to share as its a PCG template. I'm not sure you can copyright contracts but I feel like if you want it, you should sign up for the PCG.

[TheCyclingProgrammer]

FWIW, I agree. You only need to demonstrate one of the three convincingly, and I wouldn't identify MoO (alone) as the best foundation (in any case, there's a good chance that you'll be offered work and not be able to accept it in particular months if you're too busy with other things).

Part of the agreement would be that I would be contractually obliged to be available for 4 days in a month no matter how busy I am although of course being able to push some days back to the following month does give me a bit of flexibility here.

This isn't really an IR35 decision (as with pretty much all contracts), the only question is whether it's a good business decision. For a commitment of only 4 days per month, I'd take it - you can fit this in around other work, I'm sure.

I agree, I think 4 days a month is more than manageable.

The client has sent me over their draft agreement with their end client and it all looks reasonable; a few issues to resolve around response times for certain issues and notice periods but nothing major. It also looks like the deal will be a 12 month one - I'm not going to forgo nearly £30k of potential business over some (what I now think are relatively minor) IR35 concerns.

Just need to renegotiate my rate as I put my rate up in January but have been charging them my old rate up until this point.

Thanks for all the input everyone!

[jamesbrown]

It seems like I would be silly to turn this down over some IR35 concerns

FWIW, I agree. You only need to demonstrate one of the three convincingly, and I wouldn't identify MoO (alone) as the best foundation (in any case, there's a good chance that you'll be offered work and not be able to accept it in particular months if you're too busy with other things). This isn't really an IR35 decision (as with pretty much all contracts), the only question is whether it's a good business decision. For a commitment of only 4 days per month, I'd take it - you can fit this in around other work, I'm sure.

[northernladuk]

And final thing before I shut up. If you word the agreement to be with your limited and do not mention a consultant at all some form of MoO maybe with the LTD (but surely that is what a B2B contract is there to do) but they cannot demonstrate any connection to one particular person . If no person is mentioned how can the apply an employment test against nobody?

[northernladuk]

Just to add... If what these articles say is actually true I would be very dissapointed if HMRC were willing to challenge them. You are encouraged to act like a business (e.g. the BETs test and IR35) and not like a permie so when you do they try they try to apply a rule that wasn't designed to challenge this type of situation. Use it challenge bum on seat disguised employment fine but leave business alone that are trying to do it properly.

[northernladuk]

Interesting. I haven't really considered retainers before so kind of new to after a quick scan of both those articles I find it quite difficult to agree. Maybe a very badly written one in some circumstances maybe bad but in a genuine situation like this with a well written agreement I can't see how IR35 would touch it. Maybe I should read the post on more detail to understand the specifics but a in an example situation where the retainer fee is less than the full fee and the full fee only gets paid on days worked then there is zero MoO as you may actually may never be needed and in fact demonstrates strong financial risk as well. If the contract demonstrates flexibility when you are used it becomes as required which can't be seen as an obligation either. I think there are many easy ways of getting round the issues mentioned in a real situation.
I also think if you can make this more of a call off situation you dodge all these factors as well.

[TheCyclingProgrammer]

I can't see for one minute why IR35 would be an issue here. You have multiple clients, a temporary and very flexible arrangement, risk they may not want you, no fixed days and many more points. As close to safe as you could possibly be surely. I don't see a single thing in there a permie could possibly do. I am not even sure PCG would have a template for this as it is completely different to out 'standard' way of working.

Generally I agree with you. I've just read a few articles that basically say that IR35 and retainer agreements aren't compatible due to the MOO implications and its got me worrying (probably unnecessarily).

This was one:
Why retainers are bad for consultants « Steve J Bicknell

OTOH this article seems a bit more balanced and seems to take the view that MOO isn't an issue if there is lack of D&C:
Retainer Fees and IR35 - Contractor Weekly

[northernladuk]

I can't see for one minute why IR35 would be an issue here. You have multiple clients, a temporary and very flexible arrangement, risk they may not want you, no fixed days and many more points. As close to safe as you could possibly be surely. I don't see a single thing in there a permie could possibly do. I am not even sure PCG would have a template for this as it is completely different to out 'standard' way of working.