IR35 - Contractor for the same company for OOH IR35 - Contractor for the same company for OOH
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  1. #1

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    Default IR35 - Contractor for the same company for OOH

    Hello,
    I was a permanent employee for a company (let us call it A Data Technologies). I have now resigned and started a limited company and have a contract with another company (Let us call it F Financial Institution) unrelated to my original employer.

    My previous employer A Data Technologies has now asked me to join them as a contractor for doing some Out of Hours support for a specific client (Let us call this as C Client of A) and this is what the Contract specifies.

    Services will be provided to the client at the location listed below:

    • Client Name: C Client of A
    • Location of Services: Client site


    I would actually not be doing any job for them unless there is a call out. I will, however, get paid Out of Hours standby.

    So, my day job is with the new client (F Financial Services) for my limited company but I also have a separate contract with my original employer.

    Now, I have the following questions.

    1. I am pretty sure that this is a red flag as far as HMRC is concerned and I will be classified as being inside IR35 as it is literally a case of finishing on Friday and starting on Monday. Is that correct?
    2. If so, can I ask my original employer to mark their contract as inside IR35 and pay taxes accordingly while still working for the other company (F Financial Services) as outside IR35?


    Thanks in advance for your help and assistance in this regard.

  2. #2

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    When you worked as an employee, did your work include supporting the client in the way that the proposed contract expects, or is this a fundamentally different from what you were doing before? If the latter, then provided your contract is worded correctly and working practices concur, IR35 should not apply.

    If your former employer is public sector, then you should ask them to pay you net of NI and tax. If not, then until the "reforms" hit the private sector, you handle that aspect yourself. Your day work is entirely unaffected by this.
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  3. #3

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    @NotAllThere: Firstly many thanks for your quick response. Unfortunately, it is not the latter. When I was a full time (permanent) employee for my company A Data Ltd, I was doing the Out of Hours for the same client as well.

    The difference is that previously, I also provided support during business hours (in addition to the out of hours support) for the same client (and to other clients), but in the new world, I will be providing only out of hours support only for a specific client.

    The working hours is not specifically specified.

    The Consultant will work a minimum eight (8) hour working day, as part of a professional working week (Business Days during the Assignment Term).

    However, the contract does specify the following which makes it clear (at least, in my understanding) that I will be working only for a single specific client and that A Data Ltd is not providing the instructions for the work.

    Due to the nature of the Services and the Consultant’s specific skills and expertise, A Data Ltd and the Client will not instruct, direct or control the Services. Services will be provided by the Supplier and by the Consultant on the Supplier’s behalf in accordance with Best Industry Practice and assessed based on the expected outcome.

    Is it worth asking the accountant to review this?
    Last edited by MagicMovies; 9th July 2019 at 13:52.

  4. #4

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    Read more on IR35, it is on a per-contract basis.

    From what you've said, the OOH contract is almost certainly going to be inside IR35. I wouldn't even waste the money to get an IR35 review on it.

    If you have educated yourself on IR35, and had your other contract reviewed by an expert on IR35, you can operate one contract inside IR35 and one outside. The fact that you've operated one contract inside could actually help you if HMRC challenge the other one, it shows you are taking IR35 seriously.

    I'm assuming this OOH contract is going to average less than 15 hours a week, probably quite a bit less, from what you've said. So it's a relatively small part of your contracting income. You want to pay your salary out of this income, and make pension contributions out of this income as well. The net result should be that being inside IR35 will likely cost you very little. Your accountant can help you with the calculations, obviously. You may want to plan your pension contributions to be enough, along with a tax-efficient salary level, to completely negate the IR35 tax hit. Again, your accountant should help you with that.

  5. #5

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    @WordIsBond: Thanks, much appreciated especially on the other advice regarding salary / pension contributions. I will speak to my accountant regarding the same.

    Is there anything specific in what I have mentioned that brings about the conclusion that the OOH contract is definitely going to be inside IR35?

    Lastly, the hours will actually be significantly higher but the pay is pretty low on a monthly basis - probably, just over £400 per month. So, in that event, being inside IR35 is beneficial isn't it?

    Thanks once again!

  6. #6

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    Quote Originally Posted by MagicMovies View Post
    Lastly, the hours will actually be significantly higher but the pay is pretty low on a monthly basis - probably, just over £400 per month. So, in that event, being inside IR35 is beneficial isn't it?
    What's your thinking around that?
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    @northernladuk: Oh, I was just basing that on the statement by @WordIsBond (see above).

    The net result should be that being inside IR35 will likely cost you very little.

    Or have I mis-understood the question?

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    Must admit I'm not sure where WiB is coming from re it being inside. Permies don't do just on call support, it's only a fraction of his original role and lots of other things. Also for thst amount of money it's hardly worth it HMRC fighting for it.

    I'd just get the contract checked, treat it as outside and get on with it personally.

    BTW don't get your accountant to review your contract. They do accountancy stuff. Get a contract specialist like QDOS, Baur and Cottrell to do it.
    Last edited by northernladuk; 10th July 2019 at 07:57.
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    @northernladuk: Thanks! Sure, will get QDos to do the review. Can you please advice on whether the IR35 assessment is sufficient or should I go ahead with the Full IR35 Review? I am thinking that the IR35 assessment which is included (since I am taking Public Liability and Professional Indemnity with QDos) is sufficient. Is there any value add in doing the Full IR35 review?

  10. #10

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    Quote Originally Posted by MagicMovies View Post
    @northernladuk: Thanks! Sure, will get QDos to do the review. Can you please advice on whether the IR35 assessment is sufficient or should I go ahead with the Full IR35 Review? I am thinking that the IR35 assessment which is included (since I am taking Public Liability and Professional Indemnity with QDos) is sufficient. Is there any value add in doing the Full IR35 review?
    Bearing in mind the amount of money you'd make out of this I'd just have the basic contract check done. Can't see it worth spending 100's on a £400 a month gig TBH.

    Who's issued the contract? Is it the client? Best way may have been to create some kind of call off, service credit or even fixed payment type approach if they were open to the idea which would have made IR35 a non issue. They may not understand or be willing to go down this path though.

    Do you have TLC35 or IPSE+ tax insurance as well for you main contract?
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