perm via forced redundancy to contract M-F with change in hours

[Ford05]

I have done some searching and while I can find some information it does not describe my specific situation so I am looking to see if this changes things.

I am currently a FULL time perm ( 5 days) but being made redundant along with a number of other staff worldwide for a combination of the financial situation and that long term they don’t see my current role continuing.

They have offered a PART time ( 2.5 days ) contract position to work in the same area on outstanding tasks. This would simplistically fall into the friday-monday scenario.

They will specify the high level task required but will not provide the detail and will not check the work other than confirming it meets the requirements. I am a senior IT tech if that makes any difference.

I plan to
setup a limited company
get a business bank account
get business insurance
professional indemnity insurance
register for VAT
business cards
use a business accounting firm to manage the accounts

I am looking to stay outside IR35 and as I see it if the contract allows me to substitute someone to perform the same task then this would provide the main reason to not include me in IR35.

They won’t specify what days I work or if I can work from home or visit their main office that will be my choice.
The initial contract will be for 3 months
They have employed a number of previous perm staff ( not through redundancy ) as contractors.

Will the above keep me outside IR35 if they do what are the main points for doing that
or what other things should I look at

Thanks

[cojak]

THis is a company avoiding its responsibilities by forcing redundancy.

Your contract looking like it’s outside of IR35 won’t make it outside IR35, your working practices will make it that.

And this company will probably still treat you as a permie.

Basically, go contracting with a different company as these gits don’t deserve you and won’t care if you get into trouble with HMRC.

[malvolio]

Also, if there is still work to be done in the same role you can't possibly be redundant, which has other taxation issues...

So two more things to do: drop a line to HMRC's anonymous dodgy practices team and join IPSE.

[adubya]

Permie -> Contractor, same employer, no interim contracts with other clients has IR35 all over it, regardless of your contract wording.

If you do proceed then declare it inside IR35 and request a rate which reflects that.

[MrButton]

Get some advice from an employment solicitor before you go any further!

[DaveB]

If there is a union rep at your current employer have a chat with them as well.

Redundancy has some very strict rules around how it can be done and what consultation is required.

Otherwise as was said, get some legal advice. If your employer does not follow the process correctly they are breaking the law.

And if the rate they have offered you for the work as a contractor is not at least 2.5 times what you would earn as a permie turn it down and look for another job instead.

[WordIsBond]

Opposing this is unlikely to end well. If this is not going to be an ongoing full time position, they are going to find a way to make this happen.

OP has a chance to get a piece of the action while they transition this role from full-time to half time to, presumably, nothing. Sounds like they are willing to be pretty accommodating in allowing a lot of changes to take place.

OP, are the tasks clearly defined and definitively spec'd, and are you confident enough of any of them that you could put a fixed cost on them? If you could put a fixed cost on, say, half of the work, then you could:

1. Sign a generic contract that covers non-fixed cost work. Operate that inside IR35. Use it to pay salary and any pension contributions.
2. Sign a contract for fixed cost work, where you have a schedule of tasks, each one has a cost, and you are paid that amount whether it takes half as long or twice as long as you quoted. This contract would be outside IR35.

If this is your only contract, you can afford to overrun a little bit. If you quote a job at 3 days and it takes 4, and you weren't going to be working that fourth day anywhere else, it has only cost you time. You certainly want to be careful to include some cushion in your fixed prices, but using fixed prices is probably the safest way to get at least some of this work outside IR35.

[northernladuk]

Why would you go part time? Particularly for the t**ts that have just kicked you out?

You aren't contracting. You are doing a permie role just with a different remuneration method. Sack the whole sad situation off and go do it properly full time.

[malvolio]

I was just thinking, does the OP work for the BBC...? Because that's exactly the same scenario as their high-profile presenters are having to deal with.

[SueEllen]

Opposing this is unlikely to end well. If this is not going to be an ongoing full time position, they are going to find a way to make this happen.

OP has a chance to get a piece of the action while they transition this role from full-time to half time to, presumably, nothing. Sounds like they are willing to be pretty accommodating in allowing a lot of changes to take place.

OP, are the tasks clearly defined and definitively spec'd, and are you confident enough of any of them that you could put a fixed cost on them? If you could put a fixed cost on, say, half of the work, then you could:

1. Sign a generic contract that covers non-fixed cost work. Operate that inside IR35. Use it to pay salary and any pension contributions.
2. Sign a contract for fixed cost work, where you have a schedule of tasks, each one has a cost, and you are paid that amount whether it takes half as long or twice as long as you quoted. This contract would be outside IR35.

If this is your only contract, you can afford to overrun a little bit. If you quote a job at 3 days and it takes 4, and you weren't going to be working that fourth day anywhere else, it has only cost you time. You certainly want to be careful to include some cushion in your fixed prices, but using fixed prices is probably the safest way to get at least some of this work outside IR35.

Any company that sacks an employee then offers them contract work immediately shouldn't be touched by that former employee with a barge pole.

The redundancy is a sham and anyone may whistle blow.

Plus it is clear they have an issue behaving honourable which isn't good if you need to get invoices paid by them.

Btw There is nothing stopping the company - like the first one I contracted with - explaining to the staff they are making redundant there is a role but is part-time. In that case there was a guy who was being made redundant happy to take it so he could look after his young children at other times and his wife could work more.