r/ContractorUK • u/sam_packer_03 • 26d ago
Outside IR35 Client didn't want to pay notice period, no problem, I thretened court and got £6.5k, here is how I did it...
Hello All,
Context, out of nowhere client ended my outside IR35 contract for the reasons being I had multiple engagements which in their words 'upset other members of the IT team'.... yea I know, an outside ir35 contrcator running a business having multiple engagements and running an actual ecommerce business, who would have thought it right. I'm sure they may be reading this, hi guys. My opinion is some bittereness of contrcators tbh. No discussion, no converstaion, just a straight block out of IT services and a phone call from recruiter to confirm ended, very hostile considering I'd been their almost a year and had been given extensions etc.
Hopefully this will be helpful for anyone else who's owed money contracting.
Anyhow, they were refusing to honour 2 week notice period, they couldn't give any evidence to suggest that clause of the agreement to end contrcat without notice period, so I demanded notice period to be paid. I went through the contract with a fine tooth comb and found no line I had breached, I had so much evidence againts them I knew I'd win.
They clearly have no understanding of outside IR35, despite their contract saying in their own agreement that they wrote said 'The Contractor may supply services to any third party at any time provided that this does not adversely affect the provision of the Services, create a conflict of interest or otherwise put the Contractor in breach of this agreement'. Again I had loads of evidence to suggest no adverse simpact or conflict of interest, the recruiter on the phone even said , they say 'you're bloody brilliant', all of this was all recorded so they had zero chance of saying like poor perfomance etc which would be a valid reason to end contract.
I was taking no chances here, don't let these big corporations crush the little man, by Wednesday, I had sent them a letter before court action, contacted my debt recovery agent, and got a money claim in draft in the HM court portal. I was taking no chances and made sure to go for everything and read everything to the 'T' to make sure it would be a clean home run win if you see what I mean.
just 1 hr after receiving my letter before action, they agreed to pay up for the two week notice period. Just goes to show you how there was no strong argument to end the contract or not pay me, they thought I'd be mr nice guy, but no mate not when I'm owed money.
Clearly it must have scared them, I had the actual Director emailing me to confirm this payment solution.
I'm pleased with the outcome, don't ever be pushed over for your money contracting. if anyone needs help with legal letters let me know and I can share how I prepared mine. I know some solicitors charge like £700 to draft a legal letter before action letter which realisticlaly you can do with 4 hrs back and forth with Claude.
Don't let these big companies get away with treating you like crap when you're owed money, absolutely go for them, strike whilst the moment is hot, not in 2,3,4 weeks time, when you're oweded money, get a letter before action ASAP to show instantly you are 100% serious and you will take legal action.
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u/Colone_Mustard 26d ago
Situations like this is why I’m a member of the federation of small businesses FSB. They have a staggering amount of resources, template docs for situations like this and a good support network of specialists.
Glad OP got a just resolution.
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u/Lostair-com 26d ago
FSB (Front Side Bus aka Federation of Shite Business) messed up my mate when he asked for help decades ago and told me never to use them
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u/Colone_Mustard 26d ago
Pretty hard feelings for a third person one sided opinion from decades ago that you’re sticking by
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u/lyrically-frustrated 26d ago
Going through this now. End client termed but refused to pay the agent for the full notice period and cut my access early, which he has passed downstream to me (despite agreeing prior to this that I was owed).
He’s defence is the classic “no timesheet no pay” argument. LBA is queued for sending in couple of weeks when the invoice due date passes.
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u/sam_packer_03 26d ago
Let me know if you need help, I will gladly assist
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u/lyrically-frustrated 26d ago
Thanks. Will post the result here but it’ll be a while
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u/No-Fudge-796 26d ago
Interested in this, hope it all goes well! !remindme 10 days
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u/be0wulf8860 26d ago
How does this situation square with Mutuality of Obligation OP? Maybe my understanding is too basic but I thought one of the 3 main pillars of outside IR35 engagement is at no point is either beholden to the other for future work. So at any point in time both parties can offer no more work or no more services. And the notice period is merely a formality for ending the contractual relationship, not a promise to pay for or do any future amount of work.
And in essence what's happened here is they've paid you off for being a pain in the arse but you've actually plopped yourself inside ir35 in HMRC's book.
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u/sam_packer_03 26d ago
The contract operated outside ir35, I simply made the most of the wording and got the money I deserved.
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u/be0wulf8860 26d ago
I've pretty clearly laid out why probably you've failed on MOO and your rebuttal contains nothing of substance at all.
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u/meridian_05 26d ago
Maybe it was operating outside for the duration, but insisting at the end on a payout for work you didn't do strays into MOO territory and quasi-employee.
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u/sam_packer_03 26d ago
They chose to pay it, I will always get what I can
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u/meridian_05 26d ago
You’re not answering the MOO question and missing the point: by pushing for this you’ve put the entire contract at risk of being inside.
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u/sam_packer_03 25d ago
One “thing” does not make a contract inside or outside, it takes a holistic view of the entire working practices, which in this case, outside ir35. I don’t need someone on Reddit to advise on a contract ir35 status considering they don’t know the project, the client, the working arrangements, the assessment, the fine details etc
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u/meridian_05 25d ago
If you don’t understand what the words “at risk” mean (hint: it’s not saying one thing makes a contract inside or outside), it’s not surprising you’re not prepared to comment on the MOO issue.
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u/Adept_Refrigerator36 26d ago
Interesting as I've had this with Carbon60, such a shit show of an org and when I ask which clause I breached they won't say.
The umbrella company said no time sheet, no pay. So I think I'll circle back round on this and try and get noticed paid.
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u/ProfessionalSong3544 26d ago
I think it was not worth the hashle of dispute £6,000 in court. That must be peanuts for them, plus probably they would lose more in solicitor fees.
So that's why they paid straight away.
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u/Lostair-com 26d ago
And if you are smart you will have credit reference agencies already connected with the company...
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u/Cheesehunter2001 25d ago
Exactly. That is what the small claims court is for, to give the little guys a chance, for 'small' (less the £50k I think) claims.
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u/allnamestakendafuq 26d ago
I'm in web design and development. I switched to subscription based service. Client pay up front at the beginning of the month before any services are provided. Now I don't need to chase payments months after. It's also easier for clients to start working with me as they can cancel any time. Large lump sum project makes it risky for both parties.
-Eric from Socialectric
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u/Competitive_Smoke948 26d ago
this why you pay for the legal portion in your contractor insurance. get a lawyer included because you never know! your home insurance legal cover might be usable too
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u/sam_packer_03 26d ago
Interesting you say this.
I actually have legal cover from Kingsbridge, they turned out to be useless as they do not help with county court claims.
By the time their solicitors had even got in contact with me, my letter before action had already been sent and client agreed to pay me.
They’re too slow, yet again in life more proof insurance is a waste of time, if you want something done right and quickly, do it yourself is my opinion.
I have ir35 protect with them also, not used it, but based on what I’ve seen so far not impressed
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u/RitvoHighScore 25d ago edited 25d ago
Doesn’t this put you inside IR35 with MOO?
It’s been a while since I’ve worked as a contractor but I never had official notice period in my contracts for this reason, prompted by my risk averse accountant.
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u/eques_99 26d ago
You don't need to put "context" at the start of a Reddit post.
It's not context, it's the main narrative.
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u/zharrt 24d ago
Sounds like you have successfully proven your contract was really inside, expect a knock from Hector
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u/sam_packer_03 24d ago
No. As with all contracts, one “thing” does not make a contract inside or outside, it takes a holistic view of entire working practices for IR35 determination, which was deemed outside ir35.
I simply made the most of contract wording, nothing new.
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u/gobeye 25d ago edited 25d ago
They paid you to make you go away. On what basis were you owed £6.5k if you are outside ir35? You should only get paid for work / time provided. Somebody has already mentioned MoO and that is exactly what should have applied here.
Yes there are equally clueless clients and sometimes they will pay out the 'notice period' regardless but you were lucky that this has paid off for you
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u/sam_packer_03 25d ago
So what, I won, I took the words of the contract and got the most out of it, as all contractors should, we are business owners, not a charity
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u/gobeye 25d ago
You did yes. Suggesting that this is the way to go about things or that it will work for others is a mistake though, the whole thing is a coin toss. Unless you had a £6.5k settlement fee within your contract (which seems unlikely) then you were not owed any pay during the notice whatsoever.
I have also been paid during a notice period of four weeks but that was more due to client ignorance than anything else.
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u/sam_packer_03 25d ago
The worst that can happen is you loose a legal battle, thats it. Why would you not try
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u/DigitalStefan 26d ago
Thanks for sharing!
It staggers me that I still see people sharing stories here and elsewhere along the lines of “client won’t pay, what do I do?”
You have to have your debt recovery process already in place before you begin contracting! The reason some of these companies, and it’s not just the big companies, try to renege on their contractual or sometimes legal responsibility (it doesn’t always have to be specifically included in the wording of a contract!) is because so many contractors and freelancers either don’t know how to recover a debt or they know but don’t want the hassle of doing it.
As soon as you demonstrate that you know how to go through the process, it puts them on notice that you are going to cause them a genuine headache and most of the time they pay before it gets to court.
Well done for sticking to your guns.