IR35 and Rate cuts.....who's a disguised employee now?!

**slogger** · 29 July 2015, 08:53

Originally posted by TheMrs View Post

Working on the adage it's an ill wind....having had two rate cuts thrust upon MyCo in last 6 months with no negotiation or right of reply, I have been looking for an upside

Surely it would be hard to argue my contract was inside IR35 when a similar "paycut" would not be forced on employees? Sure some of them have been made redundant but only after a lengthy consultation period and much hand holding. Contrasted with contractors who arrived one day and were told your rate has been cut by x, here's your new contract. No sign, no contract, with immediate effect.

Any IR35 experts here want to comment?

i am not an ir35 expert, or a lawyer - however I know of quite a few permanent employees who have had their salaries cut - not unusual nowadays unfortunately.
however as ever listen to a lawyer instead of me!

**Danglekt** · 29 July 2015, 08:54

I'd walk on principle, but I'd do it on my terms - I mean look for a new contract immediately while taking the day rate.

Shows a complete lack of professionalism and respect. I guess it depends on what you do, but I personally wouldn't stay.

No idea on IR35, but doubt it is relevant.

**unixman** · 29 July 2015, 09:01

It all depends on the industry you are in, the state of the contract market and how desperate you are. Personally I wouldn't tolerate any rate cut. By tolerating a cut, you just make all of us poorer in the longer term. I would start looking, work the remaining term (if only a couple of months) and not seek renewal.

**pr1** · 29 July 2015, 09:31

contractors who arrived one day and were told your rate has been cut by x, here's your new contract. No sign, no contract, with immediate effect.

"here's your new contract... no contract" - what?

what does your contract say [/nluk]

**eek** · 29 July 2015, 09:33

Originally posted by Danglekt View Post

I'd walk on principle, but I'd do it on my terms - I mean look for a new contract immediately while taking the day rate.

Shows a complete lack of professionalism and respect. I guess it depends on what you do, but I personally wouldn't stay.

No idea on IR35, but doubt it is relevant.

Given that the OP works in the Oil and Gas industry walking would just result in a very long time on the bench while working hard to get a contract paying even less in a market without any vacancies...

There are times to walk and times you really just have to accept it....

**TestMangler** · 29 July 2015, 09:34

You absolutely do have a right of reply. You just didn't exercise it.

**northernladuk** · 29 July 2015, 10:20

Instead of just throwing this in to the mix and trying to make a stab at an answer why not use what you should already know about IR35 and do a bit of analysis... So.. Starting at a high level.

Does this affect the major IR35 indicators - MoO, RoS and D&C.. - NO
Does it affect your working conditions - NO

So from now on you know it's just a flag and alone doesn't affect your status.. so...

So you mentioned financial risk so lets look at that.
Can permies have wage cuts mid job - Actually yes they can and have. It's a very bad way of doing business and tons of crap comes with it but it can and has been done. An example from only two months ago.
Next 'forced employees into accepting pay cut for working Sundays' | Daily Mail Online

Is this actually financial risk? - NO - it's business. You are in a client/supplier relationship. It's not only pretty common for rate negotiations to take place many larger clients insist on a 10% year on year reduction in rate from the beginning.

So... the answer to your question. IR35 impact - Pretty much zero.

Simples.

**WordIsBond** · 29 July 2015, 10:44

I'd definitely put it in my IR35 file, but I wouldn't expect it to have much weight.

If they said, "Take the rate cut or leave today" that would be a working practice consistent with no MOO. So if your contract is clean on MOO, you could point to this and say, "See, working practices matched. No MOO."

But it probably won't make much difference.

**northernladuk** · 29 July 2015, 11:05

Originally posted by WordIsBond View Post

I'd definitely put it in my IR35 file, but I wouldn't expect it to have much weight.

If they said, "Take the rate cut or leave today" that would be a working practice consistent with no MOO. So if your contract is clean on MOO, you could point to this and say, "See, working practices matched. No MOO."

But it probably won't make much difference.

No it wouldn't. It's contractual issue, nothing to do with obligation to offer work. The work is irrelevant here. In fact the contractor is still working to his obligations as set out in the initial contract i.e. to complete it. Contractual issues have arisen and need sorting out before he can continue.

You go MoO wrong in a different thread as well. It's a grey area as people have different opinions of what it is i.e. within the current contract or after the current contract I admit but maybe a re-think?

IR35 and Rate cuts.....who's a disguised employee now?!