Is there a limit to how long you can spend with a single Client , does it affect IR35

[nc1]

If a client is continually happy with you and has a lot of work in the pipeline , is there a IR35 limit to how long a contractor can work with a single organisation before they are effectively a employer?

This has got me thinking as it looks like my client would like to re extend? - Im assuming billing other organisations at the same time would work in my favour?

Thanks in advance, still on the new side of contracting!

[northernladuk]

If you read up and understand IR35 better you will see this is mentioned many times. It will give you the answer and will give you the reasons why. It's a simple question for you but it's a long convoluted answer as it's a grey point. There isn't a cut off, there isn't but it depends on a number of other factors. You need to understand these. You could be inside from the end of your first 3 months, you could still be outside 5 years later. It's you that dictates it, not the legislation.

Only by understanding it can you know why and how to stay outside. You can't run IR35 by tickboxing simple answers I am afraid.

Maybe someone will come along an explain in great detail everything associated with your question but a much better thing to do is go and read up as many resources as you can find until you understand. There is some good guides to the right and plenty to be ready if you use Google.

Sorry for sounding a little harsh but this simply isn't a Yes/no/3 months/5 years answer.

[northernladuk]

And IMO you are not that new. It appears you've been contracting from January. That's 10 months to get the basics in order. You could have 10 months IR35 liability already without knowing it which is quite a lot.

[nc1]

And IMO you are not that new. It appears you've been contracting from January. That's 10 months to get the basics in order. You could have 10 months IR35 liability already without knowing it which is quite a lot.

Thank you for your quick response, i have taken the tests online and have tried to read up and navigate through the guides! and i seem to be low risk at the moment, i have only just started contracting. i will continue to read up, - thanks

[northernladuk]

Im assuming billing other organisations at the same time would work in my favour?

You assume incorrectly for the most part. More research on IR35 will explain why.

[TheCyclingProgrammer]

No direct impact on your IR35 status but IMO the longer you stay at a client the more the risk increases that you get complacent and start to become part and parcel of the organisation.

I appreciate some large projects can run for years but when I hear of contractors at "clients" for 3, 4 or more years I do start to wonder...

[northernladuk]

Thank you for your quick response, i have taken the tests online and have tried to read up and navigate through the guides! and i seem to be low risk at the moment, i have only just started contracting. i will continue to read up, - thanks

The tests you are taking about are the Business Entity Tests which are now defunt so ignore them. You are responsible for your IR35 status and not an online test.

You need to drop the only just started line as well. You are nearly a year in and as a director you have legal responsibilities to do things right. Pretending you are new 10 months in isn't really living up to those responsibilities.

[MyUserName]

If a client is continually happy with you and has a lot of work in the pipeline , is there a IR35 limit to how long a contractor can work with a single organisation before they are effectively a employer?

This has got me thinking as it looks like my client would like to re extend? - Im assuming billing other organisations at the same time would work in my favour?

Thanks in advance, still on the new side of contracting!

No, length of time at client is not necessarily something that puts you inside IR35.

Imagine if you hired a plumber. At any point the plumber can send in someone else from their company, refuse to do something (like if you asked him to repaint your wall), or go home without pay if there is no plumbing to do. He is a contractor and you are the client. How long he works at your house does not change the nature of the relationship.

Do you have the same relationship with your client? Or is it more of an employer employee thing? Are you used a spare resource to work on whatever needs doing? Do you change hats (tester to developer to BA etc.) etc. These things are not always a problem provided that is what you are contracted to do.

If I walked in on Monday and looked around at what everyone is doing could I tell you were a contractor or would you be doing the same work as the permies in the same way, under the same control with the same rules?

[nc1]

No, length of time at client is not necessarily something that puts you inside IR35.

Imagine if you hired a plumber. At any point the plumber can send in someone else from their company, refuse to do something (like if you asked him to repaint your wall), or go home without pay if there is no plumbing to do. He is a contractor and you are the client. How long he works at your house does not change the nature of the relationship.

Do you have the same relationship with your client? Or is it more of an employer employee thing? Are you used a spare resource to work on whatever needs doing? Do you change hats (tester to developer to BA etc.) etc. These things are not always a problem provided that is what you are contracted to do.

If I walked in on Monday and looked around at what everyone is doing could I tell you were a contractor or would you be doing the same work as the permies in the same way, under the same control with the same rules?

Thank you everyone for all the advice, this being my first contract and only working for 3 months i wanted to make sure there was nothing obvious i was missing out on, the contract from the agency looks good (substitution etc) lack of working hours and any other rules that would flag up, i have been able to work with others in the midst and have been working from home as well.

I will continue to reassess myself as i proceed

Thank you all again ..

[northernladuk]

Thank you everyone for all the advice, this being my first contract and only working for 3 months i wanted to make sure there was nothing obvious i was missing out on, the contract from the agency looks good (substitution etc) lack of working hours and any other rules that would flag up, i have been able to work with others in the midst and have been working from home as well.

I will continue to reassess myself as i proceed

Thank you all again ..

Did you get it reviewed by QDOS? If not it would be a good idea to do so. They are the IR35 experts. It's quite possible to have a substitution clause in but it isn't unfettered so not much use. Do you know enough about that to be sure it's enough?