IR35 Drivel

[suityou01]

I started by contracting into the company I am now perm in.

When I converted I kept the company I had, but effectively dormant for about a year. I still had to do my accounts at year end, but with the exception of bills for office, wifi, company phone I kept it going just in case it didn't work out. I stopped taking any salary immediately.

I then went perm, so my salary increased and so did tax. I then took entrepreneurs relief on the balance on my company account. Then at the end of the next tax year, boosted my pension up using that money to claim back some of the tax I was paying as a permie. Shares on top of the basic salary pushed me over what I would have earnt as a contractor with the lower tax.

If you can get into a company that is rapidly expanding and is going to give you shares, then a perm move is a good idea.

IR35 pointer. And a significant one. I take it this happened in the last 7 years?

Edit : I did not start this thread. This was extracted from another thread by a mod. Underhand tactics cannot go unreported.

[SimonMac]

IR35 pointer. And a significant one. I take it this happened in the last 7 years?

I think its only Permie to Contractor that Hector cares about

[suityou01]

I think its only Permie to Contractor that Hector cares about

Think about what you just said.

[SimonMac]

Think about what you just said.

I am confused?!

[eek]

I am confused?!

Well someone is..... And only 1 of the 2 people in the conversation is a certified

I will leave it amongst yourselves to decide which one of you it is....

[suityou01]

I am confused?!

OK, and only because you're my bestest CUK friend.

If you are performing a service, as a contractor, and then become permanently employed, performing the same or similar services then this is a pointer to IR35 as you could have been employed from the start.

Also the other way around as you said is also bad, and one of the scenarios that IR35 was brought in to address.

HTH

Suity

PS There goes your image btw

[aoxomoxoa]

If you are performing a service, as a contractor, and then become permanently employed, performing the same or similar services then this is a pointer to IR35 as you could have been employed from the start.

I don't think it's that simple. I'm contracting to an end client as an associate through a small consulting firm. There is currently no MOO, no D&C, and although ROS exists contractually it has never been tested. My contract has been independently reviewed and approved.

Recently they've been making overtures to have me join as a permie, but for a number of reasons I'm not (yet) succumbing to their blandishments. However risk of being caught in IR35 hasn't figured as a barrier. If I did join them D&C would be there to a limited extent, but there would be MOO. As that differs from the current scenario I don't see the problem from an IR35 POV.

Maybe if you're just a bum on a seat then it would be a risk, but if so then it's probably a risk already and you're in a fool's paradise.

[suityou01]

I don't think it's that simple. I'm contracting to an end client as an associate through a small consulting firm. There is currently no MOO, no D&C, and although ROS exists contractually it has never been tested. My contract has been independently reviewed and approved.

Recently they've been making overtures to have me join as a permie, but for a number of reasons I'm not (yet) succumbing to their blandishments. However risk of being caught in IR35 hasn't figured as a barrier. If I did join them D&C would be there to a limited extent, but there would be MOO. As that differs from the current scenario I don't see the problem from an IR35 POV.

Maybe if you're just a bum on a seat then it would be a risk, but if so then it's probably a risk already and you're in a fool's paradise.

If your working practices as a contractor were demonstrably outside of IR35 then I would say you are relatively watertight. ROS generally shouldn't be relied upon as it only takes one word from someone in HR to say it is unenforceable and it's then a sham clause.

If for example you'd been at clientco filling in holiday requests, had your own phone, were in the company phone book, used company equipment, used the canteen, were part and parcel of the organisation, and used the company laptop to watch porn and then went permie then I would defo worry.

[suityou01]

Fortunately I found some case law to back me up

Relationship change causes split IR35 decision | AccountingWEB

In this case you see how easily ROS can be dismissed.

Under IR35 rules Spencer would have been taxable as an employee if the notional contract between him and Allianz was akin to an employment contract.

The tribunal said that the substitution clause had “very little reality” and had been inserted in the contract for tax purposes. In his decision, tribunal judge Howard Nolan also noted that a substitute contractor for Spencer was not offered over the seven year period.

For the first three years of the project Spencer worked on projects for Allianz, but from 2004 it became clear that Allianz wanted Spencer’s services permanently. It no longer engaged him for projects, the tribunal said.

The tribunal concluded that for the first three years of his work for Allianz Spencer was a contractor, but from January 2004 he was in effect an employee of Allianz.

“We put the dividing line at 31 December 2003 because it was at that time that he was offered indefinite work, and it was from that date that renewals were agreed on an annual basis, and from which no further reference was made to particular projects.

[eek]

Fortunately I found some case law to back me up

Relationship change causes split IR35 decision | AccountingWEB

In this case you see how easily ROS can be dismissed.

So once again I need to bring up

as at no point was he permanent. The case goes from project work outside IR35 to standard work (probably inside IR35) while still remaining a contractor...

I think you've actually proved Simon's case that its possible to go from contract (outside IR35) to permanent with no impact on your previous work...