IR35 mutuality of obligation tips

The right mindset

  • Beyond what is in your contract, your client owes you nothing, and you own them nothing. Whilst you will have a personal connection, remember you are in a business to business relationship.
  • You should only work on projects and activities that are in your contract. If your client wants you to work on something else you at least need a contract amendment, if not an entirely new contract. Be firm with this.
  • Be mentally (and financially) prepared for early termination. If the project is delivered early, your engagement will end. If the project is cancelled, your engagement will end. Work on the basis that your client can do this with no notice.
  • When your engagement does terminate (as expected or earlier), do not simply expect more work from the client. Change your mindset to think of it as business development to win a new contract. Document this as much as possible.

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Red flags

  • Going from perm to contract directly with the same client, unless the project/role is significantly different. If you do, take specialist status advice.
  • Any commitment from the client to give you more work should the original project end early.
  • Working on tasks outside the original contract/project, for any reason.
  • A historical continued succession of contract renewals without gaps.
  • If your client terminates your contract, working outside the scope of the original contract during the notice period.
  • Being paid for absence, for example, holidays, sickness or otherwise.
  • Long notice periods – these should ideally be 30 days or less.

Day to day activities and influence

  • If you are discussing tasks and activities with your hiring manager, remind them of what is in the scope of your contract and therefore you can help them deliver, and infer those that are not, which you can’t. Reinforce the fact you can only work on activities contained in your contract.
  • As the end of a project approaches, start talking about opportunities to package activities and tasks together to build a scope for a new engagement. Treat this as a business development activity, and package together a solution. Reinforce the fact that unlike your permanent colleagues, you cannot be redeployed onto a new project with issuing a new contract, and you need to think ahead.
  • If your hiring manager does raise the possibility of a renewal, you, as a supplier should take responsibility for formalising this. You need to turn this casual conversation into a more formal approach – think like a salesperson. Sit down with your hiring manager and discuss and document the scope of the engagement. Take this burden off them.

Next → Up next in this guide: Substitution

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