Is an employer going to get rid of a PAYE contractor after 2 years because of IR35 or does that not apply to PAYE contractors?
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2-year rule for PAYE contracts
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Originally posted by Phillwin View PostIs an employer going to get rid of a PAYE contractor after 2 years because of IR35 or does that not apply to PAYE contractors?
That is up to the individual policy of the end client and the agency.
I suspect a lot of firms will continue such a rule because large firms are paranoid for reasons that range from perfectly valid to having experienced similar things in the US and never wanting the same risk.merely at clientco for the entertainment -
IR35 does not apply to PAYE contractors.
Many companies have x month/year limit rules to avoid employment claims (whether that is likely or not), which is what you be getting confused with.Comment
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Originally posted by Phillwin View PostIs an employer going to get rid of a PAYE contractor after 2 years because of IR35 or does that not apply to PAYE contractors?
There is no 2 year rule per se. It's a misconception that clients are on the hook for employment benefits after this point. Every time I've come up against it I've pointed this out and they know but still stick with the rule. Bit silly really. But that risk doesn't exist for PAYE so you'd think not BUT clients might still keep the rule in just to not have long term contractors on site, which is sensible really. Daft thing is they will get rid of the contractor at 2 years and replace them with another. Ho hum.
So it's really down to the individual client and you need to ask them what their policy is.'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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I wonder if, by PAYE contracts, the OP means FTCs and the rule on unfair dismissal if they have more than 2 years service.
https://www.gov.uk/fixed-term-contra...dterm-contract
Not sure what the reference to IR35 would be in that case though.Comment
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Originally posted by Paralytic View PostI wonder if, by PAYE contracts, the OP means FTCs and the rule on unfair dismissal if they have more than 2 years service.
https://www.gov.uk/fixed-term-contra...dterm-contract
Not sure what the reference to IR35 would be in that case though.
There are, however, contractors that have claimed they've been on site so long they are effective employees and gained employment rights which is a proper disgrace and hasn't helped this situation. Cable and Wireless vs Muscat was one of them. That might not be the best reference as there was a point about him being employed previously so old contracts and that but I'm sure there has been another case where a contractor decided he wanted the employment rights so argued he was an employee. HP seems to ring a bell but I can't find it. Was a long time ago. Kinda shoots his own IR35 status in the foot so should pay all the taxes back but dunno what happened.
So maybe companies are aware of this and just use the two years as a dead stop so not to get in to long contract situations which are risky.
'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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