Friday Monday Rule with a slight twist

[M4contractor]

Hello

Apologies if this has already been asked. I did search but could not see anything obvious.

I am looking at the possibility of moving from permanent to contractor in the same company. I realise that this locks me into IR35 due to the Friday/Monday rule, however I have a couple of questions I hope somebody could answer.

1) It is a very large company with multiple sites across the UK. If I went from Permanent at one site to being a contractor at another site (not within a commutable distance to each other), would this get me free of IR35?

2) If I left to contract at another client, when could I safely return to my current company as a contractor.

[SueEllen]

There are few issues here.

Firstly some companies especially larger ones are very careful not to let employees go and come back immediately as contractors even if it's a different site. Simply because they can get sued by the person involved, other staff can (and will) use it against the company in legal proceedings, and if there are any unions on the premise they kick up a stink about illegal working practices.

Secondly if you read your employment contract it probably has a clause that allows them to move you to a different site with your agreement. So basically moving to a different site is not a get out of IR35 as you doing what you could have done as a permie.

When is it safe to come back? It depends on the company. The people I know who have left and come back as contractors/freelancers normally have to wait a year due to the company itself setting that time limit.

[VectraMan]

The previous, but now discredited Business Entity Test says this:

Has the current end client engaged you:
 on PAYE employment terms
 within the 12 months which ended on the last 31 March
 with no major changes to your working arrangements?
If you are doing the same work, the answer to this question is Yes.
Working at a different location does not count as a major change.
If you were working for a company that is connected to the current end client,
that counts as working for the current end client. For example, if the two
companies are part of the same group.

https://www.gov.uk/government/upload...30622/BETs.pdf

That's not black and white but is probably still a good indicator. I'm working for my previous employer, WFH, but on the same project. I decided after a lot of thought there was no way I could justify not paying up. There's a chance I'll be working for them on a whole new project soon, which may mean I can justify being outside as I'm not doing the same work, or at least revisit the decision.

Make hefty pension contributions and it's not so bad. WFH makes it worth it for me, plus not having an agent is a bonus.

[M4contractor]

Thanks to both of you, I am new to this so it is still quite confusing.

I wanted to check my options before pushing forward. I am still heading into the contracting world, but will do it with another company.

[northernladuk]

IR35 is about your engagement and not your location. Bearing in mind changing with your current employer is so risky I'd suggest you read and understand IR35 much better than this. I'd say you are just guessing at the moment which is not what you want to be doing in your situation.

From the very limited information I'd say it's Fri/Mon black and white. No twists.

[malvolio]

IR35 is about your engagement and not your location. Bearing in mind changing with your current employer is so risky I'd suggest you read and understand IR35 much better than this. I'd say you are just guessing at the moment which is not what you want to be doing in your situation.

From the very limited information I'd say it's Fri/Mon black and white. No twists.

Agreed. It can be done, but only under some very specific circumstances; if your new contract is even vaguely related to your permanent role then forget it.

When can you come back? Why on earth would you want to having gone to all the bother of turning freelance and getting to understand what it entails? But if your horizons are that limited, then you need a sensible history as a contractor to provide the necessary separation - say a year or so - and a very carefully constructed contract. Far easier to rely on the open market, unless you have a niche skill in which case you're really back to square one.

[psychocandy]

There are few issues here.

Firstly some companies especially larger ones are very careful not to let employees go and come back immediately as contractors even if it's a different site. Simply because they can get sued by the person involved, other staff can (and will) use it against the company in legal proceedings, and if there are any unions on the premise they kick up a stink about illegal working practices.

Secondly if you read your employment contract it probably has a clause that allows them to move you to a different site with your agreement. So basically moving to a different site is not a get out of IR35 as you doing what you could have done as a permie.

When is it safe to come back? It depends on the company. The people I know who have left and come back as contractors/freelancers normally have to wait a year due to the company itself setting that time limit.

And never underestimate the power of permies you worked with kicking off about it.

I worked with a fellow contractor. He'd been made redundant by client from permie role. Went contracting - did a gig somewhere else for a few years. Came back to work with same original permie client, but different account working at different client site, completely different location/work etc.

After a few months the perms at his old site found out, kicked off about it. Some senior manager didnt want permies thinking they could drop out, and then come back as contractors so that was it - no extension.

Thought this was a bit harsh since the poor bugger had been made redundant, gone contracting to another place for a few years, then come back doing something completely different than before.