IR35 risk of going permie in current contract? IR35 risk of going permie in current contract?
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  1. #1

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    Default IR35 risk of going permie in current contract?

    Hey everyone, just want to gauge opinions

    Been contracting in a dev role with a large euro bank for 3.5 years, working on a single project. Manager had a chat with whole team today about banks plans for IR35 changes next year.

    The options: go permie or leave

    What would be the IR35 implications (if any) of going permie? Would my past 3 years on the project be called into question in an audit? Or is this something that happens all the time?

    Been contracting for 20 years and never even thought of going permie before, but the job market (in london) looks bleak and I've got a huge mortgage!

    Any one got any advice or experience of doing the same?

    Thanks!!

  2. #2

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    Yes, you would be significantly at-risk if your status changed from being outside to inside or employed without a significant change in working practices. In other words, if you remain on the same project doing roughly the same thing in the same way, the status change probably indicates that your working practices were inside all along.

    It may not be the first priority for HMRC to target such cases, given that you've moved to employment, but you would definitely be extremely exposed under investigation.

    If the new working practices are very different, on the other hand, then that might be neutral or even strengthen your earlier position, but that sounds unlikely based on your OP.

  3. #3

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    Danger Will Roberson Danger

    Put away 1years past money to cover future investigation


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    I've known two contractors who became permie and in each case their working relationship with the organisation changed, in particular that they became team leaders. The chances are that as a permie you will be given additional responsibilities such as supervising offshore developers, or performing more system maintenance, doing on call etc. that would distinguish your permie job from your current role.
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    Quote Originally Posted by BlasterBates View Post
    I've known two contractors who became permie and in each case their working relationship with the organisation changed, in particular that they became team leaders. The chances are that as a permie you will be given additional responsibilities such as supervising offshore developers, or performing more system maintenance, doing on call etc. that would distinguish your permie job from your current role.
    Maybe so but that's not enough for HMRC to coming sniffing really. You might win ultimately but it's the investigation you need to avoid. Simple changes like this won't be enough to brush HMRC off.
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    Quote Originally Posted by northernladuk View Post
    Maybe so but that's not enough for HMRC to coming sniffing really. You might win ultimately but it's the investigation you need to avoid. Simple changes like this won't be enough to brush HMRC off.
    But how and why would this be flagged up ?

    I can see that public contracts inside IR35 could be communicated to HMRC but not simply becoming a permie.
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    Quote Originally Posted by BlasterBates View Post
    But how and why would this be flagged up ?

    I can see that public contracts inside IR35 could be communicated to HMRC but not simply becoming a permie.
    Off pay role reporting requirements, they will know.

    What this means for an intermediary - GOV.UK

    I would be worried to, personally I would look for a clean break.

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    Quote Originally Posted by BlueSharp View Post
    Off pay role reporting requirements, they will know.

    What this means for an intermediary - GOV.UK

    I would be worried to, personally I would look for a clean break.
    Yes but he'll be a permie, not on payroll for an intermediary.
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  9. #9

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    Quote Originally Posted by BlasterBates View Post
    Yes but he'll be a permie, not on payroll for an intermediary.
    While they were a contractor they would of been reported; and it won't be hard for HMRC to run a report where someone has been paid by end client A as a contractor who is now an Employee of the end client.
    Last edited by BlueSharp; 22nd August 2019 at 13:30.

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    I'd recommend getting your company closed quickly....

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