Inside IR35 already - checking benefits of going permie

[Andy H]

Hi all

My wife is a contractor at the head office of a national retailer and the role is perfect for her - 3 days a week, in her chosen area doing what she wants to do (marketing), working round the corner from the kids school, working 8-4 so not much afterschool childcare required. She's contracting with them directly and is definitely inside IR35 (half the people there don't even realise she's a contractor!) so has been paying her income tax and NI at the correct rate since the beginning of the role. She's contracted directly with them and isn't set up via a limited company. Due to the limited days, hours and nature of the role she isn't paid a lot so when I ran through the potential benefits / costs of a limited company it wasn't worth it.

There is talk of her part of the group being sold in the next year or so, bringing a bit of uncertainty to budgets etc so we've been thinking about her becoming a permie as a way to safeguard the job. Their HR are basically clueless and haven't noticed that she has been there as a contractor for 4.5 years and isn't going through an umbrella company. She hasn't pushed the case for holiday pay etc as the most important thing for her is to keep the role going as being a stay at home mum sent her crazy!

My question is about the rights she will have accrued as a 'worker' to help us thinking about the potential negotiation for her turning permie (i.e. when speaking to clueless HR, saying 'look, I have X employment rights already, why wouldn't you save some cash and make me permanent') - from my online research, as a worker she's already entitled to the various statutory levels for things like holiday and sickness (although never claimed) and protection from discrimination. Moving to a permie would bring in redundancy entitlement (with continuous service from when she started the contract), statutory pension, and then whatever other general employment things they offer (better pension etc).

Anything I've missed?

[cojak]

Hi all

My wife is a contractor at the head office of a national retailer and the role is perfect for her - 3 days a week, in her chosen area doing what she wants to do (marketing), working round the corner from the kids school, working 8-4 so not much afterschool childcare required. She's contracting with them directly and is definitely inside IR35 (half the people there don't even realise she's a contractor!) so has been paying her income tax and NI at the correct rate since the beginning of the role. She's contracted directly with them and isn't set up via a limited company. Due to the limited days, hours and nature of the role she isn't paid a lot so when I ran through the potential benefits / costs of a limited company it wasn't worth it.

There is talk of her part of the group being sold in the next year or so, bringing a bit of uncertainty to budgets etc so we've been thinking about her becoming a permie as a way to safeguard the job. Their HR are basically clueless and haven't noticed that she has been there as a contractor for 4.5 years and isn't going through an umbrella company. She hasn't pushed the case for holiday pay etc as the most important thing for her is to keep the role going as being a stay at home mum sent her crazy!

My question is about the rights she will have accrued as a 'worker' to help us thinking about the potential negotiation for her turning permie (i.e. when speaking to clueless HR, saying 'look, I have X employment rights already, why wouldn't you save some cash and make me permanent') - from my online research, as a worker she's already entitled to the various statutory levels for things like holiday and sickness (although never claimed) and protection from discrimination. Moving to a permie would bring in redundancy entitlement (with continuous service from when she started the contract), statutory pension, and then whatever other general employment things they offer (better pension etc).

Anything I've missed?

Sorry, but she hasn't accrued any rights, not unless she takes them to court. Those worker rights are more for low-paid temps than decently paid contractors.

The negotiation you need to concentrate on is maintaining her flexible part-time status. (And continuous employment only begins at the start of the future permie contract.)

[SuperLooper]

She's contracted directly with them and isn't set up via a limited company.

In that case she can't possibly be inside IR35.

[Andy H]

This (Employment status: Worker - GOV.UK) would suggest otherwise? The contract states she personally does the work, she works in a 'line' role with no right to sub in someone else and she is given a formal number of days she can take off as holiday (although not paid). She hits every marker to be classified as a 'worker' and thus have the same rights as a 'worker'?

[northernladuk]

In that case she can't possibly be inside IR35.

Oh dear oh dear.....

[Andy H]

In that case she can't possibly be inside IR35.

Okay, to be technical about it she isn't, but if we had bothered to set up a limited company and do it that way she definitely would be. I used that as a shorthand to demonstrate the type of role and relationship with the employer.

[mudskipper]

Oh dear oh dear.....

Why? IR35 is Intermediaries Legislation. If she is on the client's payroll there is no intermediary, ergo IR35 does not apply.

Probably more accurate would be to say that if she operated via a ltdCo then IR35 would apply. But she doesn't so it doesn't.


It does sound to me like she ticks all the worker boxes, and therefore should be entitled to worker rights - but as stated may need to go to an ET to get them.

[WordIsBond]

So let's clarify. Are you saying she is self-employed and paying Class 2 and Class 4 NICs? In other words, this is false self-employment, and she probably has a load of rights, and the fact that they've not been paying things like holiday, etc, could mean a really nice claim against them.

Which sounds like she doesn't really want to do and they don't want so the obvious thing is to clarify the position to the mutual benefit of everyone.

[Andy H]

So let's clarify. Are you saying she is self-employed and paying Class 2 and Class 4 NICs? In other words, this is false self-employment, and she probably has a load of rights, and the fact that they've not been paying things like holiday, etc, could mean a really nice claim against them.

Which sounds like she doesn't really want to do and they don't want so the obvious thing is to clarify the position to the mutual benefit of everyone.

Correct - the job (right job, right place, right working pattern) is worth more than anything we would get from a claim etc. The main reason for the question is to clarify what she has at the moment to help with an approach to get a permie job if that seems to be the best route.

[WordIsBond]

Correct - the job (right job, right place, right working pattern) is worth more than anything we would get from a claim etc. The main reason for the question is to clarify what she has at the moment to help with an approach to get a permie job if that seems to be the best route.

In which case, this probably isn't the right forum for you. Some people here no doubt have some knowledge on this but you aren't going to find many experts here on what rights have accrued to someone in false self-employment. It's a workers' rights question, which isn't something likely to get much focus on this forum, where most of us are running independent businesses.