What are your clients doing with IR35 reform?

[jamesbrown]

Yes. We're looking at a very niche market and yes fixed price on deliverable's rather than daily rates.

Thank you for the best wishes.

Bear in mind that, if you aren't familiar with fixed price work, it will come as a shock vs. T&M.

Even when you're on good terms with the client and they are happy with the work, there may be some disagreement about what constitutes scope creep and that can significantly delay payments and complicate matters. You need to be very good at estimating (or understanding when to you can't and mitigating with staged contracts) and very good at preventing clients from arguing for a different scope than the one agreed originally.

I foresee some considerable pain when traditional day-rate contractors enter the brave new world of B2B and fixed price contracts, assuming that is even viable for some % of them. It may start to become clear that IR35 is not the main thing to worry about...requires a whole new skillset w/r to contract negotiation.

[BABABlackSheep]

Bear in mind that, if you aren't familiar with fixed price work, it will come as a shock vs. T&M.

Even when you're on good terms with the client and they are happy with the work, there may be some disagreement about what constitutes scope creep and that can significantly delay payments and complicate matters. You need to be very good at estimating (or understanding when to you can't and mitigating with staged contracts) and very good at preventing clients from arguing for a different scope than the one agreed originally.

I foresee some considerable pain when traditional day-rate contractors enter the brave new world of B2B and fixed price contracts, assuming that is even viable for some % of them. It may start to become clear that IR35 is not the main thing to worry about...requires a whole new skillset w/r to contract negotiation.

I think you’re absolutely right. I’ll let you know here what happens(if it happens).

[ladymuck]

The company I engage via at ClientCo (they are a small consultancy, not an agency) have asked to meet with me to talk about the IR35 changes. The chap was a bit green about these things but may have clued himself up since I first worked with him and threw his contract out the window, replacing it with an IPSE template. I need to make sure we both coach the client in the correct direction.

[Sanoffo]

Have received the following from my client on questioning their stance:

"Further to your question below I have reached out to our Tax team for clarification on this point and they have advised me that the way in which we will assess whether a contractor is within IR35 is exactly the same as how they themselves should be assessing if they are within it now or not. We will be using the HMRC CEST Tool and will have a formal dispute resolution process. The business is also currently making sure we have a full company-wide picture of our Contingent Workers and who might be affected by the changes, and will be pre-assessing job categories or contracts where a payment will be made post April 2020. All workers and managers will be communicated with as and when it is required, and there will be a Contingent Worker policy in place."

My contract renewal is coming up, I was planning on negotiating extension up to Feb next year and re-assess then. Them using the CEST tool doesn't fill me with confidence tbh.

[northernladuk]

Make sure the contract ending in Feb doesn't mean your last payment falls after the changes in April.

[GhostofTarbera]

Have received the following from my client on questioning their stance:

"Further to your question below I have reached out to our Tax team for clarification on this point and they have advised me that the way in which we will assess whether a contractor is within IR35 is exactly the same as how they themselves should be assessing if they are within it now or not. We will be using the HMRC CEST Tool and will have a formal dispute resolution process. The business is also currently making sure we have a full company-wide picture of our Contingent Workers and who might be affected by the changes, and will be pre-assessing job categories or contracts where a payment will be made post April 2020. All workers and managers will be communicated with as and when it is required, and there will be a Contingent Worker policy in place."

My contract renewal is coming up, I was planning on negotiating extension up to Feb next year and re-assess then. Them using the CEST tool doesn't fill me with confidence tbh.

Prepare for client to share results with HMRC


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[BaldGuy]

My current client is looking to 'assess the role' rather than contract/individual

Email came out from my current major client (I have several concurrent) to around 700 contractors saying that they will assess everyone individually... but then said they expect all but a tiny few to be caught, and will be assessing the role rather than us as individuals. a VERY HR view of the world.

They are cozy with HMRC and terrified of being named & shamed (or future penalties) so are climbing into bed with HMRC to be as compliant as possible. Ignoring even CEST and case law, and saying if ANY factor shows employee like, then automatically caught. That does not mention MoO but rather things like "low risk" (You bill and get paid), Use our equipment (at their insistence for AV reasons).
They predict an end of Contracting as it is now, and in future will ONLY use PAYE (Perm or Temp).

The contractors are keeping them afloat so they are heading for the rocks.

I think they expect to get the essential contractors and subject matter experts to accept a Short Term employment contract (probably at less than current equivalent rates), but its not what any of us want (and I need to keep my Company going for my other lower volume clients).

[jamesbrown]

I think they expect to get the essential contractors and subject matter experts to accept a Short Term employment contract (probably at less than current equivalent rates), but its not what any of us want (and I need to keep my Company going for my other lower volume clients).

Not terribly surprising. An increase in FTCs was always quite likely. Whether the client suffers will depend on how clients more generally react. If their response is mirrored across the other, similar, clients, then contractors can't go without work forever. FWIW, the picture seems pretty mixed so far, based on threads here and elsewhere. Too early to see the big picture.

[JohntheBike]

Not terribly surprising. An increase in FTCs was always quite likely. Whether the client suffers will depend on how clients more generally react. If their response is mirrored across the other, similar, clients, then contractors can't go without work forever. FWIW, the picture seems pretty mixed so far, based on threads here and elsewhere. Too early to see the big picture.

what does appear to be a common thread though is the FUD that HMRC are spreading which is clearly having an effect.

[PerfectStorm]

Cracking call about a roll this morning

"it's a 3 month rolling contract because they're not sure what's happening about GDPR"

"GDPR?"

"I mean IR35"

"Well, if the role's outside IR35 now, which I assume it is...?"

"It is, yes"

"...well then it'll be outside IR35 after, so they've got nothing to worry about"

"..........the client's not sure what the solution is going to be"