Role Change - Potential Working Arrangements

[Costa]

My opinion would be continue to close & MVL the original company, that way at least any historical IR35 worries will be out of the way (4.5 years could be tricky to defend if investigated, given everything else you've mentioned) - then start the new role through an umbrella

Thanks.

Yes, that is Option 3 in my list. If the client SDS comes out to be inside, then that would be the automatic choice.

However, if the SDS puts it as outside, then Options 1 and 2 also come into play (key difference between those 2 being potential applicability of TAAR). Hence, trying to assess all options.

[northernladuk]

No, they are filling it based on the role, not me. (I am being moved not to help extend my contract, but just because there was a genuine requirement on the Business side)

Keep telling yourself that but we are telling you as we see it. You say you are moving in to a completely new role. Why would the client take you on in that area if you don't have the historical skills? As I say, your argument is it is a new role not what you did before so how can you be the best candidate in the market if it's so new. They are moving you as a resource, not as the best fit for the job which is the warning flag. Up to you, we've said our piece on it now.

IR35 review is yet to be completed. But I have been informed that once it is fully agreed and signed off as outside-IR35 by client / agency / IR35-advisors, then it will also be fully covered (including any tax liability in case of potentially losing a case) by the insurance from IR35-advisors, and there will be no claw-back clause in our contract with the agency.

I don't think that's true is it? No one knows if that is possible Eek or JB is better placed to comment on that but I'm sure it's not as easy as the above.

On client's part, IR35 determination is following full rigour and process, so won't call it dubious. It is a very large organisation and I am a small fish, so they won't bend their processes for me.

And we all know the problems with big orgs keeping long term contractors. The big pharmas and the letters that went to GSK for example. The fact it's a big org that keeps contractors for ever is another flag to those that know what it's like working in those clients.

And there is nothing about dodging an MVL here. That has not completed yet (that's why Option 2 is also open).

So, while client is working on the IR35 status determination, I am just trying to consider the best option for the working arrangement going forward, given the overall circumstances.

Fair enough. I think enough of us have given our view on it.

[jamesbrown]

Thanks.

To clarify regarding Option 1, I just mentioned new SIC code as a side point (which I think may be needed, due to the role change), not as a workaround.

Main points regarding Option 1 are that this is a genuine role change (as I have clarified further in subsequent posts); when I decided to start my company closure process last year, the key commercial driver was that there was no need for the company any more (tax benefit was not the key driver); and the prospect of this new outside-IR35 contract in a new role has only come up recently, so I had no knowledge or expectation of this while deciding to close my company last year.

Regarding the new contract, the discussions are moving at a fast pace, and it is likely to become real by next week. So yes, not really hypothetical. That's why trying to firm up the best way for operating from Apr-2022 onwards, after considering all the options.

None of that matters. To provide some perspective, HMRC would still consider that you'd breached condition C of the TAAR if you went from IT consultancy to selling computers. There is literally no prospect of moving from one IT role to another and that not being "the same or a similar trade or activity" if you continue to purse as a trade. Again, Option 1 is only an option in your head.

[jamesbrown]

Highly doubt this is still outside IR35. Changing roles with the same client is a very bad sign.

Regardless, I also highly doubt that you won't be indemnifying the client. You'd better check that very closely. But even if there isn't a transfer of liability clause, that doesn't necessarily mean you're safe.

[eek]

None of that matters. To provide some perspective, HMRC would still consider that you'd breached condition C of the TAAR if you went from IT consultancy to selling computers. There is literally no prospect of moving from one IT role to another and that not being "the same or a similar trade or activity" if you continue to purse as a trade. Again, Option 1 is only an option in your head.

And to add - in case it isn't clear, going from IT Consultancy to Business Consultancy would also not be a significant enough change. It's still consultancy...

[Costa]

None of that matters. To provide some perspective, HMRC would still consider that you'd breached condition C of the TAAR if you went from IT consultancy to selling computers. There is literally no prospect of moving from one IT role to another and that not being "the same or a similar trade or activity" if you continue to purse as a trade. Again, Option 1 is only an option in your head.

Thanks.

Just to clarify - The new role is not IT. It is a Risk Manager role.

So, in summary:
Previous Role - IT BA Consultant via a Consulting firm
New Role - Risk Manager directly contracting with the Client

[northernladuk]

Thanks.

Just to clarify - The new role is not IT. It is a Risk Manager role.

So, in summary:
Previous Role - IT BA Consultant via a Consulting firm
New Role - Risk Manager directly contracting with the Client

So how have you taken on a roll that is out of your skill base? Or is it? I already pointed out the tasks you mentioned you will be doing fall squarely in to analysis, with a business ergo you will be carrying out Business Analysis. And your last role was what?

Remember it's not you, or even us, that you need to convince, it's some bod at HMRC that doesn't really give a stuff and is after his tax. Multiple people have told you what they see and he's going to be even less bothered about the nuances. 4.5 years, still outside, with a very thinly veiled attempt to avoid TAAR? If that doesn't make you a very attractive low hanging fruit I don't know what does.

But you've clearly made your mind up so good luck.

[Costa]

So how have you taken on a roll that is out of your skill base? Or is it? I already pointed out the tasks you mentioned you will be doing fall squarely in to analysis, with a business ergo you will be carrying out Business Analysis. And your last role was what?

Remember it's not you, or even us, that you need to convince, it's some bod at HMRC that doesn't really give a stuff and is after his tax. Multiple people have told you what they see and he's going to be even less bothered about the nuances. 4.5 years, still outside, with a very thinly veiled attempt to avoid TAAR? If that doesn't make you a very attractive low hanging fruit I don't know what does.

But you've clearly made your mind up so good luck.

Thanks.

Few people suddenly left the Business side, so there was an urgent requirement there. Given the timeframes involved, I was considered the best choice.

No, haven't made up my mind yet (new contract is not finalised yet). Hence, the discussion / due diligence.

My current thought process roughly is -

If the new contract is Inside-IR35, then -
Option 3 (Umbrella) is the default choice.

If the new contract is Outside-IR35, then -
If TAAR is not a significant risk, due to the role change (and wider circumstances around company closure), then may go with Option 1 (new Limited Company).
Else, may go with Option 2 (existing Limited Company), or Option 3 (Umbrella).

Just looking into the pros and cons of all options before making a decision next week (new contract situation should also be clarified by then).

[eek]

Just use an umbrella, throw as much as you can into your pension and use some of your savings.

Trust me you will be quids in.

[northernladuk]

Thanks.

Few people suddenly left the Business side, so there was an urgent requirement there. Given the timeframes involved, I was considered the best choice.

No, haven't made up my mind yet (new contract is not finalised yet). Hence, the discussion / due diligence.

My current thought process roughly is -

If the new contract is Inside-IR35, then -
Option 3 (Umbrella) is the default choice.

If the new contract is Outside-IR35, then -
If TAAR is not a significant risk, due to the role change (and wider circumstances around company closure), then may go with Option 1 (new Limited Company).
Else, may go with Option 2 (existing Limited Company), or Option 3 (Umbrella).

Just looking into the pros and cons of all options before making a decision next week (new contract situation should also be clarified by then).

What's the point. You haven't listened to a single thing anyone has said so yeah that's a good idea so go fill your boots. You really aren't going to find the answer you want to hear here.