Whereas IR35 can be a critical issue for contractors when signing on the dotted line, it is not the only thing they must consider.
Mike Keeling, One Click Group’s Operations Director, points out that contracts will typically contain other provisions, which may have serious implications.
“Obviously, the IR35 regulations may dominate the details, because they affect both the contractor and the employer, but there are aspects of the contract itself which are equally important for anyone taking on this type of work, whether in IT, construction or another sector.”
The Schedule
Agreements between contractor and employer, or contractor and agency, can include an assignment schedule. This specifies the details of the work being undertaken under the contract.
“It’s worth noting that some contracts may cover more than this specific work, which would then mean that even when the assignment is complete, the contractor is still bound to the contract.”
Consequently, contractors should check the contractual term of both the assignment and the contract itself, along with any termination provisions (see below).
Terminating a Contract
Normally a contractor should expect a contract to include details about termination. These allow the client or agency to terminate the contract if there is a breach of it, or to terminate it due to other issues, such as insolvency.
“The contractor should also be aware of what the contract says about their own rights to terminate the contract, and how they would do this”
There may also be post-termination obligations, which are like the contractual obligations in force during the term of the contract.
“Contractors should look out for things such as non-competition and non-solicitation clauses which could result in damages if they breach them, even after the contract itself has finished.”
Getting Paid
“It’s vital that contractors can see there is a payment procedure in place as part of the contract.”
Agencies and hirers tend to use their own payment systems, including timesheets and reporting mechanisms. When signing a contract, contractors should be aware of what these procedures involve, and what they must do to get paid on time.
“There should be clear wording in the contract that sets out any conditions where payments may be withheld or delayed, so the contractor knows how they must fully satisfy their contractual obligations”
The contract will also contain other contractual obligations, which the contractor must read carefully and understand, because any breach of them might lead to delayed or withheld payment.
Support for Contractors
“As a contractor, you shouldn’t feel that you’re out on a limb when taking on contracted work. There is professional support available for them and freelancers across a wide range of sectors, including umbrella services for PAYE and CIS.”
“Where contractors choose to operate through an umbrella company they can then benefit from a range of supporting services,” concludes Mike, “giving them peace of mind knowing that their tax, insurance and payments are all taken care of.”
If you want someone to take care of the details and small print on your behalf, leaving you free to focus on your work, please contact One Click Group, by calling 0345 557 1287 or visiting oneclickgroupuk.com.
For an additional read, please visit Do Contractors Need to Master Negotiation Skills?
