Splitting a contract based on projects

[Devinity]

Taking the plunge in moving over from an umbrella to MyCo and have received a contract from a client I am looking to work with directly.

I have sent this off for IR35 review - I'm already fairly sure it will fail, but am hoping it just comes down to some wording and altered clauses. Either way I would like to get a professional review too see how the land lies. Whilst that is underway, I wanted to get an opinion on something, more to help me see if what I've been studying on IR35 is right if anything.

The client would like me to work for 3 weeks to help finish the delivery of a project, before moving onto another project, though they are not sure who the end client will be yet (i.e. they have 2, and aren't 100% on timings to say today which one I'd be on). The first 3 weeks is to effectively help cover someone who is leaving.

They have given me a straight 3-month contract, with a high-chance of extension. The schedule in this is a bit wooly and states I would be providing "development services on an 'as required' basis", and also stating "Client: tba". Though it does mention the specialized technology I would be working with, this is ringing alarm bells with me, as it effectively states that I'm being contracted to do work, but they don't know what. This would be a big flag on IR35, wouldn't it?

It's my gut feel that it would be better to simply ask for a contract + schedule that just covers the first 3 weeks, explicitly naming the project and the work required. And then we would re-sign a new contract for the next project (at which point the client would be known) which would explicitly state it is for the delivery of that project + client. Would that sit better, and that's a reasonable ask isn't it?

I suspect they thought they were being good to me by going straight in with a longer contract up front. As I said, I am having the contract reviewed but I wanted to mull my thoughts on it first and seek the opinion of the experienced contractors here in the meantime!

[northernladuk]

I'd say you've got a pretty good understanding of your situation and seem to be aware if Direction and Control. I wouldn't be happy with that set up but your reviewer should be able to offer some wording to get around it. Remember though, working practices trump the contract. If they treat you like a permie it won't matter a hoot what it says on your contract so Just be aware.

[WordIsBond]

Have you considered just going with it and operating inside IR35?

Being inside IR35 for three months isn't the end of the world. If you are working direct, you've bypassed agency fees, which helps compensate for the extra tax.

It's better to have a three month contract inside IR35 than three weeks outside and then be on the bench.

Also, if they think they are being good to you, it might be worth letting them be good to you in terms of long-term relationship, compared to the few extra pounds of tax you'll pay inside IR35.

Just a few things to consider. The right answer for one person with one client might be completely different from the right answer in another situation.

[LondonManc]

Personally, I'd say having the two projects on one contract isn't an issue. I've worked on multiple projects.

LtdCo have been engaged to complete the delivery of Project A and then to commence Project B.

Any extension, assuming project A is completed, could then simply mention project B. Final end client is irrelevant, you're just working on Project A and Project B for ClientCo.

Going down to a few key deliverables on each would help, as well as adding your technical skills to be used on each.

[Contreras]

It's my gut feel that it would be better to simply ask for a contract + schedule that just covers the first 3 weeks, explicitly naming the project and the work required. And then we would re-sign a new contract for the next project (at which point the client would be known) which would explicitly state it is for the delivery of that project + client. Would that sit better, and that's a reasonable ask isn't it?

Yes. Or keep the contract at 3 months and have the schedule list deliverables for the 3-week mini-project only. Keep the schedule simple, and disallow any wishy washy catch-all 'deliverables'. That will allow you to get started.

Then engage discussions about follow-on work, capture the objectives as a new schedule to be signed off before proceeding. Personally I try to take a short break between distinct packages of work, even just a couple of days, and especially so if they are being tardy with producing a schedule, just to reinforce the ideal that I'm there only to do mutually agreed packages of work.

It's possible to do this and maintain goodwill. The problem usually is when it forces them to admit that there is no plan, or agreed requirements, and "we don't really know yet, but hey what's the problem sailor?" I haven't found a good answer to that one yet.

[Devinity]

LtdCo have been engaged to complete the delivery of Project A and then to commence Project B.

My issue was, at this stage, they don't know what project B is, so the contract is effectively stating "some work TBD". If it could explicitly state each project up front, I would have been more comfortable.

It's possible to do this and maintain goodwill. The problem usually is when it forces them to admit that there is no plan, or agreed requirements, and "we don't really know yet, but hey what's the problem sailor?" I haven't found a good answer to that one yet.

They've been quite up-front that they don't know what the exact plan is, because they're essentially waiting on 2 sign-offs from an end client. They do however need me in to help finish another project, by the end of which they will know what project they need me on. That's what got me to thinking this seems like it should be split into two.

[Contreras]

They've been quite up-front that they don't know what the exact plan is, because they're essentially waiting on 2 sign-offs from an end client. They do however need me in to help finish another project, by the end of which they will know what project they need me on. That's what got me to thinking this seems like it should be split into two.

What I meant was if you feel more comfortable with separate contracts then do that. Otherwise it's OK to have a single contract with multiple schedules and, IMHO, these do not all need to be defined up front.

If a follow-on schedule cannot be agreed by the point the initial work is complete then contractually you are free to go. So I suggested a planned break as it adds some leverage to getting a sign-off. No need to mention IR35, you just prefer to work with agreed objectives to avoid disappointments.

[LondonManc]

My issue was, at this stage, they don't know what project B is, so the contract is effectively stating "some work TBD". If it could explicitly state each project up front, I would have been more comfortable.

They've been quite up-front that they don't know what the exact plan is, because they're essentially waiting on 2 sign-offs from an end client. They do however need me in to help finish another project, by the end of which they will know what project they need me on. That's what got me to thinking this seems like it should be split into two.

In that case, just have the first contract for Project A, for three months then the extension should cover contract B once it is properly defined. I'm surely you could mutually agree to cancel contract 1 at a given point in time and get contract 2 issued to reflect the new project.