Managed Service Company to Direct contractor with same client

[takethebus]

Background - My employer has recently lost the contract at my current client who wish to source the roles as contractors. The client want me to stay and my employer would not stand in my way.

1st question is that even though I have been on the client site for a number of years I have always been paid and managed by my employer would I still fall under IR35 - I think I may?

I already have a fairly good idea of what my employer charges for my services so feel I may be in a fairly strong position with an agency with regards to rate, job fit. An suggestions how i should approach the negotiations?

I'm probably looking to go the umbrella route if IR35 caught as the contract will be for a 1 year term likely to renew, anything wrong with the logic?

Thanks for reading

takethebus

[Martin at NixonWilliams]

1st question is that even though I have been on the client site for a number of years I have always been paid and managed by my employer would I still fall under IR35 - I think I may?

Not necessarily - It depends on your contract and working practices. As you will no longer under the control of your employer and will be in business on your own account, I assume your working conditions will change considerably?

[DirtyDog]

1st question is that even though I have been on the client site for a number of years I have always been paid and managed by my employer would I still fall under IR35 - I think I may?

Why? Have a read on IR35 and see which of the three criteria you think you would fail on. If you fail on all three, then you are right.

I already have a fairly good idea of what my employer charges for my services so feel I may be in a fairly strong position with an agency with regards to rate, job fit. An suggestions how i should approach the negotiations?

With confidence - you are the one with the power here. Charge them what they are paying at the moment, or a little bit more if you can get away with it. If the client won't pay, then will you be sticking with your current employer?

I'm probably looking to go the umbrella route if IR35 caught as the contract will be for a 1 year term likely to renew, anything wrong with the logic?

Assuming the rate is good enough, you'd still be better off with a Ltd, particularly if you think that you may continue with your own company. You can make a little bit by being on the VAT FRS, you have 5% for expenses as well, and there is one less company in the loop to disappear with your money.

If the rate isn't good enough, or you aren't prepared to run your own company, then a decent umbrella is the way forward.

[takethebus]

Thank you for the responses I just assumed that I would fail as its a service role I perform and not project work so hard to define nature of work to be performed.

I hadn't thought about flat rate vat, expenses until you mentioned it, every little helps.