IR35 AFTER April IR35 AFTER April
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  1. #1

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    Default IR35 AFTER April

    Evening all, hypothetical scenario I wanted to pick your brains on please. The below is assumed to all be with the same client.

    1. Contract starts outside IR35 May 2019 for role within IT;
    2. Original Project ends Dec 2020, agree to join different team in a different role on a permanent basis;
    3. Contract extended for 6 months to June 2020, after IR35 reform, within new role.
    4. June 2020 take permanent role in same role as 3., ride off into the sunset.



    I understand that accepting a permanent position in a genuinely different position within a company for whom you were formally contracting is fine from an IR35 perspective, provided you feel confident that you can evidence as such.

    However, point 3., i.e.: a temporary interim 6 month contract in new role before agreeing permanent is an absolute no-no.

    In this scenario, should HMRC flag the preceding 24 months of contracting as possibly caught by IR35 due to the ultimate move to permanent, who bears the liability - is it me as the (former) contractor, or the client, given that the bulk of the contract falls pre-IR35 changes but date of the switch to perm is after?

    My reading of the legislation is that in this scenario, it would be the client that is liable, but not sure if this is wishful thinking/positive bias on my part.

    I am possibly faced with this scenario (TBC). Heart says to go with it, as I've been very happy at current client, but head says to pursue other (inside IR35) contract opportunities that I have in process.

  2. #2

    bored now

    eek's Avatar
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    From Dec onwards treat it as inside, use an umbrella - then transition to permie.

    What you don't do is from outside to inside or outside to permie while doing the exact same type of work.
    merely at clientco for the entertainment

  3. #3

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    PerfectStorm's Avatar
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    Quote Originally Posted by eek View Post
    From Dec onwards treat it as inside, use an umbrella - then transition to permie.

    What you don't do is from outside to inside or outside to permie while doing the exact same type of work.
    We checked this out last time round and doing this was perfectly acceptable in some circumstances, e.g. one where clients no longer engage with contractors and so make a blanket determination. In the event we were going to become permanent employees of the agency. The timing doesn't matter.

  4. #4

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    Quote Originally Posted by PerfectStorm View Post
    We checked this out last time round and doing this was perfectly acceptable in some circumstances, e.g. one where clients no longer engage with contractors and so make a blanket determination. In the event we were going to become permanent employees of the agency. The timing doesn't matter.
    Are you sure you've got that right because it's a critical piece of information. It's the difference between being safe and being at the top of HMRC's list. Are you sure clients who don't want to use contractors make a blanket determination?

    Gotta be really careful.
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    bored now

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    Quote Originally Posted by northernladuk View Post
    Are you sure you've got that right because it's a critical piece of information. It's the difference between being safe and being at the top of HMRC's list. Are you sure clients who don't want to use contractors make a blanket determination?

    Gotta be really careful.

    +1 - Blanket ban on the use of PSCs -> Fine
    Blanket determination everyone inside IR35 ->slight (well a lot of) problem there
    merely at clientco for the entertainment

  6. #6

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    May or may not be relevant, but the company had a mature approach to IR35 last year. My personal situation isn't resultant from a blanket ban - company will continue to engage contractors on an outside IR35 basis, but the new role is for a fairly new team and they're looking to retain the knowledge so wanting to build the team around permanent staff.

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