IR35 ‘cheat sheet’

Pete is a Senior Engineer and Business Director. Passionate about the AWS Cloud and its limitless potential. Motivated, professional and independent thinker that works best when faced with difficult challenges. Extensive experience of architecting, automating, and monitoring the full infrastructure stack to deliver best-practice DevOps culture to Public and Private sector business clients.
Reposted with permission
6prog is a facilitator of freelance contracts and commentator on recruitment in general. For more information reach out hello@6prog.com

IR35. So, you were telling me?

People keep wanting to talk about IR35. It can get a bit boring as I’m not seeing much innovation coming out from the supply side of the industry.

If you will indulge me here is the 6prog 6point action plan:

A fully signed SoW is part of our contractural process

The creation of a 6prog working relationship is based on milestones and deliverables. These are baked into the agreement so all parties understand what their company is signing up to deliver or receive.Why this matters: If you are genuinely acquiring a full service it should be clearly laid out in advance. Any supplier will want to know what they are there to achieve and when (if?) it has been completed. It is simply not sufficient to hire someone on the basis that ‘we will work out what work is on a day to day basis’.Indeed the client should not be controlling or directing the supplier at all.This is why 6prog project layer represents both a way of creating the work order and a way of discussing and editing it before the work is commenced.

SoW can be milestones payment based (not only daily or hourly)

The Statement of Work is between two businesses (not individuals) and it is set up with either hourly, daily or milestone payment terms.Payments made should be tied to deliverables that are in the hands of the freelancer to complete. As a professional freelancer you should ensure you have a reasonable amount of insight on the feasibility of each deliverable. What are the dependancies? Are there any significant risks of failure? 

Named substitutes (not theoretical right of substitution) 

For years we have been told that the supplier should be able to supply a named resource who could be switched if necessary. Given that many freelancers operate as individuals this clause is somewhat farcical.  6prog enables freelancers to build a book of contacts and where needed can be named as substitutes on the statement of work. The right to substitute and the planned option to do so… that’s much more powerful than an extra clause in a contract.

Both parties trading via 6prog pay a service fee 

6prog operates as a connector and ‘paperwork’ enabler so operates more as a SAAS provider than a recruiter. It charges all users the same SAAS fee (3%) based on usage of the platform. I find it hard to correlate the notion of employment with the choice to trade via a platform. We will have to see what HMRC thinks about this in due course. However, I’m certain this is a better setup than being a link in an RPO chain where the freelancer has no control over their engagement with the end client and the RPO holds the cards. 

Freelancers decide payment timescales 

As a benefit to buyers and suppliers, 6prog’s service fee is based on fortnightly charges and payments and this is just 3%.  We will be creating a flexible mode, where clients who want to ‘pay late’ or suppliers that want to be ‘paid early’ will be choosing a higher service fee to be applied. It works the other way too though. The faster the client wants to pay, the lower the service charge and the longer payment terms the supplier selects, the lower their service charge.

6prog partnerships with three main umbrellas so 6prog can be either with ltd co or a PAYE person 

6prog recognises that sometimes the project is not out of scope and so clients will want the supplier to be clearly paying NI as a PAYE member of staff.  6prog suppliers can select an umbrella from our partners and also choose their own. We will then support clients who need to see this by way of reporting who is available for such a set up. 

Furthermore, clients (this includes companies and freelancer suppliers) of 6prog are able to call on our partners at IPSE, Crunch and QDoS for advice and support on the matter.

AND Finally, it is critical that the working relationship between parties is managed correctly. Having set the tone by using the 6prog SoW it is important this is continued in the delivery of the services. 
If you made it this far then I salute you. I’m sure you would like to be spending time on work in hand (as would I) but I hope this was helpful!
Let me know when we can next catch up.
Andy

6prog is a facilitator of freelance contracts and commentator on recruitment in general.

6prog is a facilitator of freelance contracts and commentator on recruitment in general. For more information reach out  hello@6prog.com

IR35 | 6/6

  • 6prog Partnerships in play with three main umbrellas so 6prog can be either with ltd co or a PAYE person 

6prog recognises that sometimes the project is not out of scope and so clients will want the supplier to be clearly paying NI as a PAYE member of staff. 

6prog suppliers can select an umbrella from our partners and also choose their own. We will then support clients who need to see this by way of reporting who is available for such a set up. 

6prog is a facilitator of freelance contracts and commentator on recruitment in general. For more information reach out hello@6prog.com

IR35 | 5/6

  • Freelancers and clients decide payment timescales 

So this is not yet live in the platform but it is something I talk about often. As a benefit to buyers and suppliers, 6prog’s service fee is based on fortnightly charges and payments and this is just 3%. 

We will be creating a flexible mode, where clients who want to ‘pay late’ or suppliers that want to be ‘paid early’ will be choosing a higher service fee to be applied. It works the other way too though.

The faster the client wants to pay, the lower the service charge and the longer payment terms the supplier selects, the lower their service charge.

6prog is a facilitator of freelance contracts and commentator on recruitment in general. For more information reach out hello@6prog.com

IR35 | 4/6

  • Both parties trading via 6prog pay a service fee 

6prog operates as a connector and ‘paperwork’ enabler so operates more as a SAAS provider than a recruiter. It charges all users the same SAAS fee (3%) based on usage of the platform. I find it hard to correlate the notion of employment with the choice to trade via a platform.

We will have to see what HMRC thinks about this in due course. However, I’m certain this is a better setup than being a link in an RPO chain where the freelancer has no control over their engagement with the end client and the RPO holds the cards. 

6prog is a facilitator of freelance contracts and commentator on recruitment in general. For more information reach out hello@6prog.com

IR35 | 3/6

  • Named substitutes (not theoretical right of substitution) 

For years we have been told that the supplier should be able to supply a named resource who could be switched if necessary. Given that many freelancers operate as individuals this clause is somewhat farcical. 

6prog enables freelancers to build a book of contacts and where needed can be named as substitutes on the statement of work. The right to substitute and the planned option to do so… that’s much more powerful than an extra clause in a contract.

6prog is a facilitator of freelance contracts and commentator on recruitment in general. For more information reach out hello@6prog.com

IR35 | 2/6

  • SoW can be milestones payment based (not daily or hourly)

The Statement of Work is between two businesses (not individuals) and it is set up with either hourly, daily or milestone payment terms.

Payments made should be tied to deliverables that are in the hands of the freelancer to complete. As a professional freelancer you should ensure you have a reasonable amount of insight on the feasibility of each deliverable. What are the dependancies? Are there any significant risks of failure? 

6prog is a facilitator of freelance contracts and commentator on recruitment in general. For more information reach out hello@6prog.com

IR35 | 1/6

  • fully signed SOW is part of our contractural process

The creation of a 6prog working relationship is based on milestones and deliverables. These are baked into the agreement so all parties understand what their company is signing up to deliver or receive.

Why this matters: If you are genuinely acquiring a full service it should be clearly laid out in advance. Any supplier will want to know what they are there to achieve and when (if?) it has been completed. 

It is simply not sufficient to hire someone on the basis that ‘we will work out what work is on a day to day basis’.

Indeed the client should not be controlling or directing the supplier at all.

This is why 6prog project layer represents both a way of creating the work order and a way of discussing and editing it before the work is commenced.

6prog is a facilitator of freelance contracts and commentator on recruitment in general. For more information reach out hello@6prog.com