IR35 Hokey Cokey IR35 Hokey Cokey
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  1. #1

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    Default IR35 Hokey Cokey

    I've done a search and apologies if this has cropped up elsewhere but I've thought of a longer term IR35 scenario that I wanted advice on.

    Are there likely to be any complications being inside IR35 one gig then switching to a new outside role then ending up back in an inside IR35 role?

    I've contracted for 6 years and worked with 5 clients and all contracts were deemed outside IR35 by QDOS with agreed deliverables in the contract such as carrying out an IT restructuring, that I believe mitigated the risk of being inside.

    I'm about to speak to a recruiter about a new 12 month IT Director role that in all likelihood will be inside IR35 post April 2020.

    Are there any specific difficulties with repeatedly opening and closing a Ltd company and alternating with an umbrella if inside IR35, in this scenario?

    As I do several different types of role such as IT Director, Head of IT Strategy, Consultant etc, I can see this scenario possibly happening.

    I've checked with some of the specialist interim providers I know who are giving fairly generic advice. I can see for my sorts of roles that fixed term contracts might also become more popular.

  2. #2

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    Quote Originally Posted by edison View Post
    I've done a search and apologies if this has cropped up elsewhere but I've thought of a longer term IR35 scenario that I wanted advice on.

    Are there likely to be any complications being inside IR35 one gig then switching to a new outside role then ending up back in an inside IR35 role?

    I've contracted for 6 years and worked with 5 clients and all contracts were deemed outside IR35 by QDOS with agreed deliverables in the contract such as carrying out an IT restructuring, that I believe mitigated the risk of being inside.

    I'm about to speak to a recruiter about a new 12 month IT Director role that in all likelihood will be inside IR35 post April 2020.

    Are there any specific difficulties with repeatedly opening and closing a Ltd company and alternating with an umbrella if inside IR35, in this scenario?

    As I do several different types of role such as IT Director, Head of IT Strategy, Consultant etc, I can see this scenario possibly happening.

    I've checked with some of the specialist interim providers I know who are giving fairly generic advice. I can see for my sorts of roles that fixed term contracts might also become more popular.
    Why repeatedly open and a close a Ltd company? Why not keep it going and alternate between it and an umbrella depending on the role? If an inside role does go on for a long long time, the cost of 'running' a dormant Ltd is very small.

    Christ, I had a Ltd dormant for 12 years, you know just in case ;-) only closed it due to divorce :-)

  3. #3

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    In anticipation of exactly this type of scenario we set up our Freeflex product. Freeflex allows an individual to switch between operating through a limited company and using an Umbrella without barrier.

    During times when the Umbrella solution is required we will continue to meet the limited companies statutory filing responsibilities and advise regarding the tax implication of mixing PAYE salary and remuneration from your PSC and then reporting that through your personal SATR. This product is available to all our clients without additional charges and we aim to facilitate the use of either option so all clients need to do is notify us of their intentions / needs.

  4. #4

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    Quote Originally Posted by edison View Post
    I'm about to speak to a recruiter about a new 12 month IT Director role that in all likelihood will be inside IR35 post April 2020.
    Why would the role be deemed inside IR35 in April 2020 but not now?
    I didn't think the IR35 criteria was changing just how it is being enforced...

  5. #5

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    Quote Originally Posted by gbonner View Post
    Why would the role be deemed inside IR35 in April 2020 but not now?
    I didn't think the IR35 criteria was changing just how it is being enforced...
    Indeed, it's just who determines that has changed. The role is either in or out and that can be determined now.

  6. #6

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    Quote Originally Posted by gbonner View Post
    Why would the role be deemed inside IR35 in April 2020 but not now?
    I didn't think the IR35 criteria was changing just how it is being enforced...
    Quote Originally Posted by gables View Post
    Indeed, it's just who determines that has changed. The role is either in or out and that can be determined now.
    I was concerned with it being a 12 month gig and come April it is determined as inside. I haven't got all the details of the scope of the role/work required but I suspect it could be a 'bum on seat' job that would be harder to pass as outside from April 2020. To pre-empt that, I wondered if it would be better to assume inside pre-April?

    Or am I worrying unnecessarily?

  7. #7

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    Quote Originally Posted by Patrick@Intouch View Post
    In anticipation of exactly this type of scenario we set up our Freeflex product. Freeflex allows an individual to switch between operating through a limited company and using an Umbrella without barrier.

    During times when the Umbrella solution is required we will continue to meet the limited companies statutory filing responsibilities and advise regarding the tax implication of mixing PAYE salary and remuneration from your PSC and then reporting that through your personal SATR. This product is available to all our clients without additional charges and we aim to facilitate the use of either option so all clients need to do is notify us of their intentions / needs.
    Good plan but with agencies only dealing with umbrella companies on their 'preferred supplier list' have you managed to get your umbrella solution on these?

  8. #8

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    Quote Originally Posted by gbonner View Post
    Why would the role be deemed inside IR35 in April 2020 but not now?
    I didn't think the IR35 criteria was changing just how it is being enforced...
    The role may still be outside, but the client doesn't want to take any risks or they just deemed everyone inside to avoid complications.

  9. #9

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    Quote Originally Posted by craigy1874 View Post
    Good plan but with agencies only dealing with umbrella companies on their 'preferred supplier list' have you managed to get your umbrella solution on these?
    Indeed, we do have coverage in terms of PSL's that we are on with agencies and time will tell how much that service is needed / demanded and how quickly the market returns to / finds it's new normal!

  10. #10

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    Quote Originally Posted by edison View Post
    I was concerned with it being a 12 month gig and come April it is determined as inside. I haven't got all the details of the scope of the role/work required but I suspect it could be a 'bum on seat' job that would be harder to pass as outside from April 2020. To pre-empt that, I wondered if it would be better to assume inside pre-April?

    Or am I worrying unnecessarily?
    Obviously I haven't seen the details but a question I would have is: is this covering a permie post?

    I recently took on an IT Manager role where I really did have carte blanche on how I carried out the role; there was no supervision, direction and control in how I did things (in fact no one in the organisation would know how to carry out the role) other than upfront agree some deliverables and a timescale for them, no MoO but also no realistic RoS. However, this was covering a permie post from which the previous IT Manager had legged it, so in that light I decided to declare it inside and operated through an umbrella.

    So to your bit in bold above, if this is an existing permie post then I would go inside. If it's a totally new post then the possibly of going outside is there if this is looked upon as a role being developed by you with carte blanche on how it's done, in that sense it could be viewed as a consultant role I suppose.

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