Contractual Status and IR35 Change

[Too Late]

Hi all,

I’m in a bit of a tricky situation and would appreciate some clarity.

I currently hold a contract with a consultancy that is explicitly outside IR35. Over the past 2–3 weeks, the consultancy has suggested that the arrangement might shift to inside IR35.

It’s now been confirmed that we are indeed moving inside IR35 and are being asked to move under an umbrella company. The consultancy has informed me that I will need to sign a new contract with the umbrella company in order to be paid for May—despite the fact that I worked the entire month under the existing outside IR35 contract.

According to the contract I signed with the consultancy, any termination by either the supplier or service provider requires four weeks' notice. I have not received any written notice of termination or contract amendment.

I’m therefore challenging this on the basis that:

I have received no formal, written notice of any change to my contract;

I completed the month of May under an existing, valid outside IR35 agreement.


My understanding is that a legally binding contract requires written notice for any material changes, and I’ve seen no such notice.

As a side note, I handed in my resignation on Monday, giving the required four weeks' notice, as I’ll be moving to a permanent role. I would prefer not to move from contractor to umbrella to perm in quick succession.

Thanks,

[Countdown]

I know this sounds simplistic but

1. You have a Contract for Services covering May
2. They need to pay you in line with the Contract
3. They can't just arbitrarily change the T&Cs and apply them retrospectively.

[MustangGT]

Countdown said:

I know this sounds simplistic but

1. You have a Contract for Services covering May
2. They need to pay you in line with the Contract
3. They can't just arbitrarily change the T&Cs and apply them retrospectively.

Exactly this. If I understand the OP correctly, currently you do not have an inside IR35 contract, therefore it cannot apply at this time.

[TIGA84]

Countdown said:

I know this sounds simplistic but

1. You have a Contract for Services covering May
2. They need to pay you in line with the Contract
3. They can't just arbitrarily change the T&Cs and apply them retrospectively.

This.

They would have (and should have) done an IR35 determination before you joined to see if was in/out. If it was out and you've signed the contract, they then need to pay you outside at whatever £ it is.

If they have then reviewed the position and its changed to become inside for whatever reason - it may have been borderline and they went with outside, as is fairly common, then they need to give you notice on the first (if there is any) and issue you with a new inside contract from the date when the first one ends, should they need continuation of services.

Cheeky gits, tell them to FRO. Sounds like they ballsed up the first time round and are trying to get you to pay for the mistake.

ETA - I didn't read your leaving bit, in that case all the contract should be paid outside, as thats what you signed and have given notice under.