TUPE vs IR35

[spook050]

Hi,

I am working as permanent staff for an IT company. I have been based on client site with civil servants on a public sector contract my company won for the last 5 years working with niche technology stacks. This year my company lost the contract as of summer 2019 a new company takes over. The new company already has a lot of staff on site for the same public sector client for general IT services. A lot(maybe 75% of the staff) this company provides to the public sector are contractors.

Seeing as my company lost the contract I am up for TUPE in summer 2019.
I have heard that you cannot go from employee Friday to contractor Monday. Can I go from employee company 1, to contractor company 2? Instead of taking TUPE and working alongside a bunch of contractors on way better money?

Sorry if it sounds like I don't know what I am talking about .. I don't! .. Obviously the 50 contractors already here are somehow outside IR35(or they believe so) .. I just need to know if I can join them as contractors following their same practices rather than TUPE as permanent.

Thanks

[malvolio]

Hi,

I am working as permanent staff for an IT company. I have been based on client site with civil servants on a public sector contract my company won for the last 5 years working with niche technology stacks. This year my company lost the contract as of summer 2019 a new company takes over. The new company already has a lot of staff on site for the same public sector client for general IT services. A lot(maybe 75% of the staff) this company provides to the public sector are contractors.

Seeing as my company lost the contract I am up for TUPE in summer 2019.
I have heard that you cannot go from employee Friday to contractor Monday. Can I go from employee company 1, to contractor company 2? Instead of taking TUPE and working alongside a bunch of contractors on way better money?

Sorry if it sounds like I don't know what I am talking about .. I don't! .. Obviously the 50 contractors already here are somehow outside IR35(or they believe so) .. I just need to know if I can join them as contractors following their same practices rather than TUPE as permanent.

Thanks

Quick answer is yes but it would be (a) a bad idea and (b) probably not achievable. It's too late at night for more detailed explanations, but TUPE has its own rules for one thing, one of which is you transfer under the same Ts&Cs or you are made redundant.

But get over the idea that the contractors are on shedloads more than you. Take off their overheads and taxes and they probably aren't.

[spook050]

Quick answer is yes but it would be (a) a bad idea and (b) probably not achievable. It's too late at night for more detailed explanations, but TUPE has its own rules for one thing, one of which is you transfer under the same Ts&Cs or you are made redundant.

But get over the idea that the contractors are on shedloads more than you. Take off their overheads and taxes and they probably aren't.

Well my salary is less than 1/3 the day rate that my current company gets for me, so there's bound to be a decent difference!

We had a TUPE meeting recently with our HR to teach us things like what you have mentioned. I have no interest in TUPE though and would only be interested in sticking around if I could join them as a contractor. My feelings are why should I join another company that just puts me on client site alongside their other contractors and I am treated on a daily basis like a contractor. I am sick of more than 2/3 my day rate going towards a company I don't feel I am a part of. The public sector team I work with are very keen to keep me as I have the most knowledge of a particular area that is worth a lot to the department and could impact their public reputation(news if my systems failed). Obviously at the end of the day, if it is not possible it is not possible, and I will spend the next 6 months finding a company that suits me better, e.g. home working etc.

Thanks!

[malvolio]

On the money front I charged one consultancy 600 a day and was charged out at over 2000...

Don't believe everything you hear about incomes.

[WTFH]

Well my salary is less than 1/3 the day rate that my current company gets for me, so there's bound to be a decent difference!

Does your salary include holiday pay?
Do you get the same salary each month, even if there are bank holidays in the month?
Are you comparing your take home salary with the amount invoiced for them, or with their take home?

[WTFH]

Re-reading your posts, just a thought... if you have niche skills and are very good at your job, why go through a support company? Why not go out to agencies and get contractor roles?

[spook050]

Does your salary include holiday pay?
Do you get the same salary each month, even if there are bank holidays in the month?
Are you comparing your take home salary with the amount invoiced for them, or with their take home?

Rough overview:

My current package: 50k salary, 5% pension, 20 holidays + 10 bank holidays paid, sick pay.
I have calculated the above to roughly be worth 58k + sick pay, so lets say 60k. (before taxes)

My current day rate I am charged out at: 700. Assuming I am on site 220 of the 260 working days of the year, they take in 154k.

There are definately factors I have not though of, such as the cut that company 2 will take before paying me out of the day rate and difference in tax amounts. I just think either way it would be a lot more than 60k.

[spook050]

Re-reading your posts, just a thought... if you have niche skills and are very good at your job, why go through a support company? Why not go out to agencies and get contractor roles?

I guess this is also an option I could try for a few months since I have some time to find a new job and I could even TUPE temporarily whilst I still look.

I have a meeting with company 2 next week to ask the same questions that I asked here around IR35. It sounds like I have my answer though :/

Out of curiosity, is there anything I could do to change the circumstance and become just like one of their other contractors? e.g. Move off the client completely for 3-6 months?

[Lance]

Rough overview:

My current package: 50k salary, 5% pension, 20 holidays + 10 bank holidays paid, sick pay.
I have calculated the above to roughly be worth 58k + sick pay, so lets say 60k. (before taxes)

My current day rate I am charged out at: 700. Assuming I am on site 220 of the 260 working days of the year, they take in 154k.

There are definately factors I have not though of, such as the cut that company 2 will take before paying me out of the day rate and difference in tax amounts. I just think either way it would be a lot more than 60k.

you will likely attract between £350 and £400 a day.
No way you'll get £700 a day. End of.

Is £400 a day better than £50k. Yes. Financially by about 50% by the time you get to take it home. Which would drop to around 25% better if inside IR35. That's if you could get £400.
We don't know your skillset and it may be that you get £50k because your employer can sell you to that client. That doesn't mean you can sell yourself on the open market with no contracting experience.

As others have said that ignores pension, sickness, holiday etc.
Go contracting because that's what you want to do. It's a risk, and the rewards, as demonstrated, aren't huge, but they are there.

Bypassing that TUPE process to go contracting might not be possible at all. For a start you'll have restrictive covenants in your employment contract that might prevent you. So you must only consider it in the context of the rest of the market.

HTH

[WTFH]

My current day rate I am charged out at: 700. Assuming I am on site 220 of the 260 working days of the year, they take in 154k.

Remember, these companies have to pay for their other overheads, pay your NICs, corporation tax, your equipment, etc. And make a profit. £50k that you see as your pre-tax salary is probably closer to £75k to them.

If they are charging you out at £700 per day, half that to get a rough idea of what you could get going independent. That tends to be how consultancies calculate their selling prices - take the cost of the person, double it, and that’s the rate to the end client.

If you don’t like it, go independent. If you insist on working through consultancies, either you need to question why you are doing that, or you have to just accept it.