perm to contract - same company

[smalldog]

Hi all, so my current perm role is winding down due to a restructure and will probably finish up in circa 5-6 months. My company are happy for me to go contract as the role finishes up and is a bit of a kickup for what is essentially redundancy. However and probably obviously the IR35 bell beckons and I would be caught unless the contract is structured accordingly.

So I would be very appreciative of any posts from people that have done this and the mechanics of how it was structured and was it challenged by HMRC. Ive had a brief chat with QDOS and another accountancy and will also discuss with our legal team in the company tomorrow in terms of contract structure.

The essence of being IR35 compliant seems to be making sure a contract is structured around fixed deliverable projects rather than mon-fri 9-5. Substitution is a daft clause and unrealistic to me personally, my company dont want me to leave due to my expertise during their transitory period. Some random wont have the experience I bring and have brought for the last 5 years off and on.

[stek]

I'd say go in at three times your current rate/salary/wage/whatever.

Otherwise walk.

[sal]

Perm to contract for the same company on it's own doesn't affect your IR35 status much, if at all. Can it increase the chance of you being investigated - yes. Can it bring you grief in other ways, giving the fact that you will be made redundant, only to return as a contractor - yes. If as you say you are so valuable to the company why would they make you redundant in the first place?

You IR35 status is determined by the contract wording AND the actual work place practices. If you continue working using the same pattern as before - you will be 100% inside IR35. But that doesn't mean you can't go for it, treat the contract inside IR35 and pay Salary/NI/TAX instead of dividends or use Umbrella. Your take home pay will suffer but it's not the end of the world.

[smalldog]

Perm to contract for the same company on it's own doesn't affect your IR35 status much, if at all. Can it increase the chance of you being investigated - yes. Can it bring you grief in other ways, giving the fact that you will be made redundant, only to return as a contractor - yes. If as you say you are so valuable to the company why would they make you redundant in the first place?

You IR35 status is determined by the contract wording AND the actual work place practices. If you continue working using the same pattern as before - you will be 100% inside IR35. But that doesn't mean you can't go for it, treat the contract inside IR35 and pay Salary/NI/TAX instead of dividends or use Umbrella. Your take home pay will suffer but it's not the end of the world.

Hi Sal, the company are going through a restructure and until the new heads are recruited then Im needed. Its a very amicable exit, ive been working with them for 5 years (off and on) just time to move on. I cant just walk either as got golden handcuffs (about 250k options) that havent yet vested, but if Im flexible and help them out during the change they will allow me to take them with me in 6 months time.

Its a real tough one, if Im going to be out of pocket contracting due to IR35 then might as well just stay perm! Guess thats what the govt want!!

[sal]

So staying perm is on the table, then how can you speak of redundancy? HMRC doesn't care about the details, redundancy must follow strict set of rules. If you are made redundant because of restructuring only to be re-hired (perm/contract doesn't matter) essentially doing the same job even if it bears different title HMRC will be all over your Employer.

Just because you are going to be inside IR35 or under Umbrella doesn't mean you will be out of pocket contractor - it all depends on what rate are you going to negotiate. Plenty of calculators out there, pick a rate that will bring a satisfactory take home pay while under Umbrella and ask for it.

[smalldog]

So staying perm is on the table, then how can you speak of redundancy? HMRC doesn't care about the details, redundancy must follow strict set of rules. If you are made redundant because of restructuring only to be re-hired (perm/contract doesn't matter) essentially doing the same job even if it bears different title HMRC will be all over your Employer.

Just because you are going to be inside IR35 or under Umbrella doesn't mean you will be out of pocket contractor - it all depends on what rate are you going to negotiate. Plenty of calculators out there, pick a rate that will bring a satisfactory take home pay while under Umbrella and ask for it.

Essentially I can just carry on until my role no longer exists, thats probably 6 months away. I can spend the 6 months on my current terms, or contract my choice. But they wont be paying me anymore than my salary, just an equivalent day rate. Reason being they are doing me a favour letting me keep options that havent yet vested.

[FatLazyContractor]

Just because you are going to be inside IR35 or under Umbrella doesn't mean you will be out of pocket contractor - it all depends on what rate are you going to negotiate. Plenty of calculators out there, pick a rate that will bring a satisfactory take home pay while under Umbrella and ask for it.

^^ This

The other option is -> Walk !

[smalldog]

^^ This

The other option is -> Walk !

see my latest post, cant Walk or lose lots of yet to vest options. Day rate has to be equivalent to perm salary as my kickup is keeping the options.

[jmo21]

Sounds like it'd be easier to just delay the redundancy?

[Bunk]

see my latest post, cant Walk or lose lots of yet to vest options. Day rate has to be equivalent to perm salary as my kickup is keeping the options.

If you can't walk, how can you switch to contracting? If staying there as a contractor means you keep your permie benefits then there's no question about IR35, it's inside.