Renewal of contract, increased notice period Renewal of contract, increased notice period
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  1. #1

    Nervous Newbie


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    Default Renewal of contract, increased notice period

    Hi All,

    I have been working on a project for the past 6 months with a single client. They wish to extend my contract for another year due to a new project.
    However, they want to put a clause in my contract for a 1 month notice period as they want security from me that I won't up and leave mid project as I am a key contributor to this.

    Would this effect the IR35 status for this contract, everywhere I have read says it is a very fine line. Everything else will stay outside IR35, i.e. Where/When/How

    Any advice would be much appreciated!
    Andy

  2. #2

    Fingers like lightning


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    Who reviewed your original contract to say you are currently outside IR35?




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  3. #3

    My post count is Majestic

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    My first bit of advice would be to get a good understanding of IR35. You really should have enough knowledge to be able to handle situations like this.

    My second would be to do some research using google to find articles or the google search method to find similar posts on here. The google search method is explained at the link below. Notice periods have been covered ad infinitum and aren't that complicated. You would have come across your answer carrying out the first bit of advice TBH.
    https://www.contractoruk.com/forums/...uk-forums.html

    Third bit of advice is you can't really be extended and be given a new piece of work. You need to have a clear statement of work (or even better still a new contract but thats a bit OTT) to describe what you are doing. If you are just moved from project to project under a job title type contract you are in danger of falling foul of D&C.

    Third bit of advice is nothing wrong with a month. Any longer isn't good but 1 month is OK. Pain in the ass but nothing wrong it IR35 wise. As long as you've got your three main pillars and other aspects of your working conditions are outside there is nothing wrong at all. Not really a fine line at all.

    Fourth bit of advice is to get yourself up to speed with the changes coming in 2020. If the client decides they are going to put you inside in 2020 you are screwed with a 1 year contract. Get reading... fast.

    Fifth bit of advice is you should have had your first contract checked by the likes of Baur and Cottrell or QDOS. If they make changes to it then it's a good idea to get it checked again. If there is a problem with the notice period it will come out in this check.
    Last edited by northernladuk; 25th July 2019 at 12:11.
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  4. #4

    Super poster


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    Quote Originally Posted by andy952 View Post
    Hi All,

    I have been working on a project for the past 6 months with a single client. They wish to extend my contract for another year due to a new project.
    However, they want to put a clause in my contract for a 1 month notice period as they want security from me that I won't up and leave mid project as I am a key contributor to this.

    Would this effect the IR35 status for this contract, everywhere I have read says it is a very fine line. Everything else will stay outside IR35, i.e. Where/When/How

    Any advice would be much appreciated!
    Andy
    A. Call it a new contract rather than an extension because it is a different role.
    B. Don't sweat the one month notice period if everything else is fine.
    C. Are you aware of the IR35 'reform' coming in April? Is your client?

    If they classify as a large client, they are going to have to make a determination as to whether this is inside or outside before this contract is up. If they determine that it is inside from April, you'd be certain to lose any attempt to claim it was outside before then, whatever the notice period. If they determine it is outside, then the liability from April lies with them but HMRC is extremely unlikely to pursue IR35 on this contract at all.

    In short, having a one month notice period probably won't matter with this contract. It's a relatively insignificant pointer anyway. The biggest factor is what your client is going to do in April. If they won't give you an outside determination by the first half of February you may need to exercise that notice clause.

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