IR35 and set working hours?

[Claire Freshney]

I'd like some advice, I am just agreeing a contract which is outside IR35. Out of courtesy I asked if I could do the 4-day working week. They have said no they would like 5.

I don't understand this, as that isn't outside IR35? It should allow me fully flexibility unless of course there are important meetings etc. I should be able to change my days each week? Where I work etc...

Can someone confirm this?

 

[Financial-Modeller]

The client probably requires you to be available on weekdays.

The client is probably anticipating that if you are requesting a day rate 25% higher for four days per week, and they invite you to a meeting on the fifth day, their overall cost for your service increases.

 

[DWS]

As it’s your Company then what you decide to offer is up to you, but whether they still decide to give you the contract or not is up to them.
Depends how much you want the work

 

[Paul MH]

As far as I understand it there are no set rules about what is or isn't IR35 - it's just how likely you are to be considered to be working in the same way that an employee is - if every other aspect of the contract is supportive of outside IR35 e.g. substitutability, no guarantee of continuation of work, fixed deliverables, then you could argue that it is outside IR35 but with a fixed working rate.

However that is something that HMRC may investigate and would not help in defending the case.

Here are some other factors you should consider:

• Does your client have the right to decide how the work is done? (No supports outside IR35)
• Does your client have the right to decide where you do the work? (No supports outside IR35)
  
• Does your client have the right to move you from the task you originally agreed to do? (No supports IR35)
  
• Do you have fixed deliverables? (yes supports outside IR35)
• Do you have the ability in the contract to provide a substitute worker that you pay through your limited company? (Yes supports outside IR35)
• Does the company in question have talent in house that could do the job you are doing or do you have specialist skills (You being a specialist supports outside IR35)

 

[Newchodge]

I would suggest that asking if you could do a 4 day week is the wrong attitude. As an independent contractor you should establish your clients needs and then tell them how you propose to meet those needs, then negotitate details. Employees ask permission.

 

[IanSuth]

I would suggest that asking if you could do a 4 day week is the wrong attitude. As an independent contractor you should establish your clients needs and then tell them how you propose to meet those needs, then negotitate details. Employees ask permission.

This

If the client is trying to proscribe a lot of the working practices then it "sounds" like they are thinking of the task in an Employer/Employee way and not in a Client/Supplier manner, this is when people start falling into IR35 issues

 

[Claire Freshney]

I would suggest that asking if you could do a 4 day week is the wrong attitude. As an independent contractor you should establish your clients needs and then tell them how you propose to meet those needs, then negotitate details. Employees ask permission.

I do agree - but isn't it polite to just ask?

 

[paulears]

Setting hours of work is not always a good ‘decider’. Theatres are actually one of the things that demonstrate it. No good, as a contractor requesting yo work only mornings, when the venues need people in the evenings, so a six day a week venue, that is dark every Monday as their standard would expect self-employed technical folk to be available the hours they need. That doesn’t seem to impact IR35 in practice.

 

[UK Contractor Accountant]

Who said the Contract was outside IR35.

Is this a large organisation subject to new IR35 rules for the Private sector?

Might be worthwhile getting the Contract reviewed by a IR35 specialist..

 

[Newchodge]

I do agree - but isn't it polite to just ask?

In business?

 

[Claire Freshney]

In business?

This is the thing, when you are hired via a recruiter - you are never the "consultant' regardless of if the contract is outside of IR35 of not, they want you to behave and treat you as an employee. I could be picky about this and stand my ground, but i'd get no contracts?

Yesterday I challenged it with the recruiter.... but he was like 'i will ask the client'.... like i was going to book time off, or needed to ask for a holiday..... it's bizarre

 

[Claire Freshney]

Who said the Contract was outside IR35.

Is this a large organisation subject to new IR35 rules for the Private sector?

Might be worthwhile getting the Contract reviewed by a IR35 specialist..

This is a large organisation, but obviously new to IR35

 

[UK Contractor Accountant]

Exemption for small companies
The new rules will not apply to small companies (end clients) as defined by the Companies Act:

• Annual Turnover of less than £10.2 million
• Balance sheet total less than £5.1 million
• Number of employees less than 50

If an end client satisfies two of the above requirements, then the off-payroll rules will not apply.

In this case, the personal service company will remain responsible for determining the IR35 status of its contracts with an end client.

 

[UK Contractor Accountant]

Does it qualify as Small?

 

[Claire Freshney]

Setting hours of work is not always a good ‘decider’. Theatres are actually one of the things that demonstrate it. No good, as a contractor requesting yo work only mornings, when the venues need people in the evenings, so a six day a week venue, that is dark every Monday as their standard would expect self-employed technical folk to be available the hours they need. That doesn’t seem to impact IR35 in practice.

But a theatre wouldn't hire someone to work outside of IR35, as they need to determine working hours? Or I believe if impact of work would be affected such as if someone works in a bank that is only open 9-5pm, then they should adhere to that. But if there's no "valid" reason.... just they want you to be in the office for collaboration purposes, what happens then?

 

[Claire Freshney]

Exemption for small companies
The new rules will not apply to small companies (end clients) as defined by the Companies Act:

• Annual Turnover of less than £10.2 million
• Balance sheet total less than £5.1 million
• Number of employees less than 50

If an end client satisfies two of the above requirements, then the off-payroll rules will not apply.

In this case, the personal service company will remain responsible for determining the IR35 status of its contracts with an end client.

Could you explain this in simple terms?? So a company who is classed as small......???

 

[UK Contractor Accountant]

Could you explain this in simple terms?? So a company who is classed as small......???

classed as small if it meets 2 out of the 3 criteria mentioned above.

 

[Newchodge]

Could you explain this in simple terms?? So a company who is classed as small......???

Whenever a'contractor' takes on work for a client someone has to establish whether that individual is a contractor or a deemed employee. A small organsation can allow the 'contractor' to make their own assessment. A large organisation has to undertake the assessment.

 

[IanSuth]

This is the thing, when you are hired via a recruiter - you are never the "consultant' regardless of if the contract is outside of IR35 of not, they want you to behave and treat you as an employee. I could be picky about this and stand my ground, but i'd get no contracts?

Yesterday I challenged it with the recruiter.... but he was like 'i will ask the client'.... like i was going to book time off, or needed to ask for a holiday..... it's bizarre

The recruiter should have given you lot of paperwork which explains everything in a statement of work

As an ex recruiter I will say it is quite likely the consultant you spoke ot has zero idea aorund ir35 other than how your status affects his margin/commission. PAYE means the agency has a lot of extra costs which get passed on to employer (employers NI, holiday, pension etc) so the client has likely said "we can pay £x per hour/day" and the consultant has worked back from there to a ltd company rate which he has used, if it is suddenly found to fall inside IR35 either the client has to pay a lot more or the agency will be losing money per hour.

Have a look at this https://www.rec.uk.com/our-view/insights/business-advice/making-statement-work-work-you

Also look at this - the explanatory notes on the various choices of contract will give you an insight into the recruiters thought processes (or lack of)
https://www.rec.uk.com/recruiters/legal/ir35