Offered to revert back to PSC

[PITman]

Hi,

My end client blanket moved all contractors to PAYE in Feb. So for March we have all been working on a new PAYE contract, with a reduction in fee for employers NI.

On Friday afternoon we were all sent a email offering for us to revert back to our old Ltd contracts. We must decide by c.o.b. today.

I'm feeling very nervous about this, I just cant see what's in it for them apart from additional administrative burdon of changing everyone back. The cynic in me says they're preparing for a easier mass cull due to the current climate. There's also the risk from having worked a month as PAYE.

I've asked my accountant for advice asap.

What would you do?

Any advice, thoughts much appreciated.

[ladymuck]

There is a risk, absolutely, but no-one can quantify how big it is.

I would be asking why the client want to do that. I'm guessing they don't want the admin overhead?

Being on their payroll and starting before 28 February means you'd be eligible for CJRS, if the client chose to furlough you and claim it. Putting you back onto your Ltd Co means they can just bin you off and not have the admin of administering the scheme. Although they could still just cancel the contract anyway as you've no rights after such a short time.

TL;DR - yes there's a risk but only you can balance up whether it's worth it.

[mudskipper]

I'm presuming this is in response to the IR35 reform delay, and would give you the opportunity to operate outside IR35 if you feel that is the correct determination.

At the current time, if you're on client's PAYE, I'd feel inclined to stay there - that way if you're affected by the virus you should be in line for the full support package. Umbrella situation is less clear.

[GhostofTarbera]

I would switch back in a heartbeat


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[eek]

I'm presuming this is in response to the IR35 reform delay, and would give you the opportunity to operate outside IR35 if you feel that is the correct determination.

At the current time, if you're on client's PAYE, I'd feel inclined to stay there - that way if you're affected by the virus you should be in line for the full support package. Umbrella situation is less clear.

this - if there is any chance of the company stopping work, given that you seem to have been on payroll before February 28th I would be keeping PAYE as you will get a minimum of 80% pay if furloughed.

Equally IR35 was brought in to stop Friday to Monday leavers and while it may seem cruel to say this, moving back to your PSC would be an obvious example of doing just that.

[PITman]

Thanks guys. So stuck on what to do. Both contracts have a generous 4 weeks notice, other contracts i've had have only been a week. Given that the 80% is capped at 2500 a month for 3 months, i'd be better off with 4 weeks notice.

Plus, we werent payroll until 1st March. So perhaps ineligablenfornthe 80%. So i guess the biggest risk is ir35 having payrolled for 1 month.

It just smells fishy, at this time of crisis they're going to go through that administrative effort of quickly switching us back.

[jayn200]

Thanks guys. So stuck on what to do. Both contracts have a generous 4 weeks notice, other contracts i've had have only been a week. Given that the 80% is capped at 2500 a month for 3 months, i'd be better off with 4 weeks notice.

Plus, we werent payroll until 1st March. So perhaps ineligablenfornthe 80%. So i guess the biggest risk is ir35 having payrolled for 1 month.

It just smells fishy, at this time of crisis they're going to go through that administrative effort of quickly switching us back.

What did you end up doing?