Working through the regulations

[NetContractor]

I have been contracting for a University for over 2 years on the same project. When I heard about the new regulations, I assumed it didn't apply to me, because the University "is not public sector". I thought Public Sector only applied to Government.

Then, about a month ago, my agent called me and explained that the University WAS public sector because the definition of public sector actually had to do with compliance to the freedom of information act.

Backwards and Forwards, and my clients; those with whom I have direct involvement with, deemed me outside of IR35. Unfortunately someone higher up in the university had other thoughts and claimed they would "not accept a sub" even though it was clearly stated in my contract, and therefore I am to be subject to IR35. The ruling was delivered TONIGHT.

I told them as soon as I found out I was subject to the regulations; if it is deemed inside, I will be leaving the project. So they are prepared for me to leave.

However, my questions is...If the university will agree a NEW contract, whereby I am clearly not under their control, work from home, on my own equipment, in my own hours, etc. etc., can I continue? Or do I have no choice but to leave the project?

(I want to stay with the project, partly for the money, but also because I am the only developer on it, and if I leave it will likely fail, which is a shame)

[BigRed]

A sub is not the only criteria (and has always been dubious anyway unless actually invoked). If they declare you outside it's their responsibility, not yours.

[northernladuk]

I'd question you status without all this going on. Granted its only on the facts you've presented and a whole host of assumptions but... Two years as the only resource? Sounds very part and parcel to me. Time can take any outside gig inside so two years is something of a risk, to add to that the only resource. Sounds like exactly what HMRC are after to me. You can honestly say you are not under D&C of the client? You say it will fail without you as well. I'm not surprised they won't allow a sub... Just like they wouldn't with a permie. Exactly how long is left in this project?

2 years with one dev sounds odd to me. You sure you haven't fallen in to a support role as well which is double trouble?

Dressing a contract up isn't going to work, it's about working practices amongst other things.

Could you be a little too comfortable there and getting out in to the big world and getting in to big projects would do your CV the world of good... Or doesn't Dev work like that.

Anyway, you need to be paid before the 5th to avoid any possibility of retro inspection so you've not much time to get this sorted.

[NetContractor]

I'd question you status without all this going on. Granted its only on the facts you've presented and a whole host of assumptions but... Two years as the only resource? Sounds very part and parcel to me. Time can take any outside gig inside so two years is something of a risk, to add to that the only resource. Sounds like exactly what HMRC are after to me. You can honestly say you are not under D&C of the client? You say it will fail without you as well. I'm not surprised they won't allow a sub... Just like they wouldn't with a permie. Exactly how long is left in this project?

2 years with one dev sounds odd to me. You sure you haven't fallen in to a support role as well which is double trouble?

Dressing a contract up isn't going to work, it's about working practices amongst other things.

Could you be a little too comfortable there and getting out in to the big world and getting in to big projects would do your CV the world of good... Or doesn't Dev work like that.

Anyway, you need to be paid before the 5th to avoid any possibility of retro inspection so you've not much time to get this sorted.

Interesting...thanks.

The reason why the project has taken 2 years, and is likely to take 2 more is because of poor requirements delivered by the client; they are constantly changing their minds. And wanting the minutest of detail included in the solution too, which they inevitably change their mind at several times after writing.

No, it is not a support role, OR truly under D&C. This is a single project role, and the client does not have the skill to know HOW to get the end result...They tell me what they want and I tell them how to achieve it.

Yes; my agency has agreed to pay the contract out by the 5th, so at least my previous invoices will not be subject to the regulations.

However, I am not looking to "dress up the contract". I admit, lately I have accepted certain rules by the client which may lead to D&C...I have slipped into working regular hours, for example, and while they do not tell me HOW to write my code, they are slowly specing out minute details which may cross the boundary. So I can see, where if continued in this manner, my contract would be subject to IR35.

What I am wondering however if I can give the client an ultimatum. ie. "I will stay, if we do a new contract whereby to tell me what you want the final result to be and I go away and deliver that without input, in my own time, at my own pace, in my own premises, using my own equipment, and with the help of others whom I employ (if need be), etc.". If they agree to changing the actually working practices AND the contract, could the project continue.

The reason I think the project will fail (without me) is because the technology and architecture is one which I chose. To find people whom are familiar with the exact suite of technologies used by this project will take them time. (They were interviewing for about 6 months before I came on board). Then when they do find someone there will (as there usually is) a 1 month lead time where that person needs to come up to speed with the codebase before they become productive. So yes...I see me (my company) as integral to the success of this project, and I would like to see it succeed.

At the moment I have given the option (this only came about last night, so I have yet to speak with the client), to increase the rate to accommodate IR35. The reason for this question was hopefully to find someone whom is aware of how these regulations work, and if the working practices can be changed to be compliant and outside of ir35, so I can keep my day rate the same. Get it? I am offering to either keep my working practices the same, and change my day rate, or change the working practices and keep the day rate the same.

THanks.

[gables]

Interesting...thanks.

The reason why the project has taken 2 years, and is likely to take 2 more is because of poor requirements delivered by the client; they are constantly changing their minds. And wanting the minutest of detail included in the solution too, which they inevitably change their mind at several times after writing.

No, it is not a support role, OR truly under D&C. This is a single project role, and the client does not have the skill to know HOW to get the end result...They tell me what they want and I tell them how to achieve it.

Yes; my agency has agreed to pay the contract out by the 5th, so at least my previous invoices will not be subject to the regulations.

However, I am not looking to "dress up the contract". I admit, lately I have accepted certain rules by the client which may lead to D&C...I have slipped into working regular hours, for example, and while they do not tell me HOW to write my code, they are slowly specing out minute details which may cross the boundary. So I can see, where if continued in this manner, my contract would be subject to IR35.

What I am wondering however if I can give the client an ultimatum. ie. "I will stay, if we do a new contract whereby to tell me what you want the final result to be and I go away and deliver that without input, in my own time, at my own pace, in my own premises, using my own equipment, and with the help of others whom I employ (if need be), etc.". If they agree to changing the actually working practices AND the contract, could the project continue.

The reason I think the project will fail (without me) is because the technology and architecture is one which I chose. To find people whom are familiar with the exact suite of technologies used by this project will take them time. (They were interviewing for about 6 months before I came on board). Then when they do find someone there will (as there usually is) a 1 month lead time where that person needs to come up to speed with the codebase before they become productive. So yes...I see me (my company) as integral to the success of this project, and I would like to see it succeed.

At the moment I have given the option (this only came about last night, so I have yet to speak with the client), to increase the rate to accommodate IR35. The reason for this question was hopefully to find someone whom is aware of how these regulations work, and if the working practices can be changed to be compliant and outside of ir35, so I can keep my day rate the same. Get it? I am offering to either keep my working practices the same, and change my day rate, or change the working practices and keep the day rate the same.

THanks.

The general consensus here is that if you keep the same working practices and are then deemed inside then your are likely to be viewed by HMRC as deemed inside for the time period before i.e. in your case 2 years, that's a lot of potential retro grab.

Personally I don't see requirements speccing as control; they don't tell you 'how' to write or go about writing the code, hell you've even specified and implemented the tech stack without input from the client - you can't get anymore independent than that. Despite NLUK saying you sound like part and parcel (I get his view point), that's also often used when there are permies doing similar work, that's not the case here, you're the specialist. It's not your problem the client keeps changing the reqs (unless you're tulipe at gathering the reqs) if fact it's good for business no?

I'd be inclined to see if you can educate them that you're outside if that's genuinely the case (my bit above is based on the few facts you've mentioned) or risk a retro grab.

[malvolio]

The reality is that time is not a factor: why penalise someone for pleasing their client? What is a factor is being shifted from one job to another with no change in your contract or schedule, so you become part and parcel of the organisation. You can fall victim to that in a month, never mind two years.

If your contract is to deliver a single piece of work, regardless of how long it takes or what in-flight changes are imposed to the specification of the work, then it is not an indicator of being caught by IR35.

The case being referenced here was where the guy was outside IR35 for years, having new contract schedules from the client as each new requirement came in. He was then found inside IR35 when he stopped getting those new contracts and simply did whatever was asked of him.

[NetContractor]

Thanks everyone.

Today is the first day I get to confront the client after the agent calling me with the universities decision last night.

As far as I know they are expecting me to be finished on Friday in light of this,. Frankly I am looking forward to a new challenge; it is just a shame that I can't finish this project for them. ...unless I can convince them to change the working practices to suit.

Incidentally, the control side of it. Recently the hr manager has started creating me tasks like...."remove button x from the screen" ams "add column y to the database". It has got a little too granular for my liking. ..in probably better off leaving tbh.

[TheFaQQer]

However, my questions is...If the university will agree a NEW contract, whereby I am clearly not under their control, work from home, on my own equipment, in my own hours, etc. etc., can I continue? Or do I have no choice but to leave the project?

Of course you can continue, the only person making you leave the project is you.

Whatever the new contract says, however you work, whatever you are doing, the PSB will need to make a determination of your IR35 status. If they assess you are inside then the fee payer must deduct tax and National Insurance from your invoice and pay you gross. If they assess you are outside IR35 then you will receive your invoice gross.

But they still need to do the assessment on the new contract anyway, and don't forget that any payments you receive after April 5th fall into the new legislation regardless of when the work was done.

[NetContractor]

Of course you can continue, the only person making you leave the project is you.

Whatever the new contract says, however you work, whatever you are doing, the PSB will need to make a determination of your IR35 status. If they assess you are inside then the fee payer must deduct tax and National Insurance from your invoice and pay you gross. If they assess you are outside IR35 then you will receive your invoice gross.

But they still need to do the assessment on the new contract anyway, and don't forget that any payments you receive after April 5th fall into the new legislation regardless of when the work was done.

Yes. As previously mentioned, all outstanding invoices will be paid on Friday 31st March, even the one I submit on Friday.

The client has asked me what rate I will accept for a new contract, to keep me on the project, within the guidelines of IR35. They are actually currently seeing if the University is making a blanket decision of will accept any working practices as outside.

Does anyone know what the actual cost of the legislation is in comparison to being outside? Given that I can't claim travel expenses due to being on site for over 2 years; Currently on a day rate of £400. What does it need to be to mitigate being inside IR35?

[northernladuk]

You can't claim expenses as soon as you reasonably expect to be on site for two years. So probably the beginning of the extention that took you to 2 years.