Contracting without an agency

[amos]

I've been contracting for a few years now, but entierly through agencies. However, I've now been offered a contract directly with a client, and am wondering what differences there will be apart from a little extra cash?

Is there any form of additional insurance that I'll need? That say agencies provide by default?

I'm a PCG member, so I'm going to look at their template contracts, as the client wants me to provide all the paperwork.

Any tips from more experienced contractors?

-- Amos --

[weemster]

Direct to client is great, I have done a little bit in my time - personally I would avoid a contract (this would work in your favour from a ir35 point of view) but get a signed purchase order.

[blacjac]

Direct to client is great, I have done a little bit in my time - personally I would avoid a contract (this would work in your favour from a ir35 point of view) but get a signed purchase order.

Definately do not avoid a contract!

A proper contract is good for IR35, and not having a contract leaves you wide open to all sorts of nasties!
The PCG one would be a good one.


The only other thing to be aware of is that in dealing direct it is you that will have to chase up the AP department of clientco when they don't pay an invoice, and that this will happen.

[weemster]

What sort of nasties ?

[Beefy198]

Non-payment, them claiming work wasn't done as agreed etc. etc.

[thunderlizard]

PCG is a good place to start. Or since you've used agencies lots before, you could model your contract on some of them (if you cut out the sillier clauses you'll find it gets quite short).

There are many fewer "nasties" direct than with agencies; payment can be slow but anything longer than 3 months is rare.

[weemster]

Agree with all points. I had a good experience with working direct (with an active incentive to make sure things were done right and on time i.e I got royalties on future sales of the software - I suppose looking at it it was more of a joint venture with them paying me and them claiming R&D costs) sure it was a bit of a punt at the start and my accountant advised not to be to hung up on the contract. Everyone and their situation is different but it worked well that way for me

Another thing I would say is I did a little bit of free work for this client before he asked me to join in the venture. I suppose I am saying being a little blase pays dividends......sometimes.

[MPwannadecentincome]

The only other thing to be aware of is that in dealing direct it is you that will have to chase up the AP department of clientco when they don't pay an invoice, and that this will happen.

If you have a late payment clause in your contract and you mention the Late Payment of Commercial Debts (Interest) Act 1998 and European Directive 2000/32/EC you tend to find that payment materialises on time

[MPwannadecentincome]

What sort of nasties ?

apart from what is already mentioned...

how to terminate / notice period
who owns the intellectual property, copyrights
right to subcontract
who pays for which expenses
liability for claims or penalties for non-delivery or late delivery
payment terms

etc
etc
etc

[Emigre]

Contracts shouldn't all be one way. A professional contract is a reflection on you. Include all the areas that a normal contract would. In addition to what's been said:

Data Protection
Confidentiality

I'm assuming that contract will be provision of you through myCo to clientCo. Include non poaching clauses, particularly you onto their payroll. If later on they insist you go permie you will have some bargaining power.

Direct is great if you can get it. As one of the earlier posts said, you will need to chase payment every week/month. Create a good relationship with the accounts payable function - its a lunch well invested.

Good luck