• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.

Role Change - Potential Working Arrangements

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Role Change - Potential Working Arrangements

    Hi All,

    I would like to invite your thoughts regarding my situation (as part of my wider research / due diligence).

    I have been contracting since 2008.
    I used the same limited company from 2008 to Mar-2021.
    In Apr-2021, the consultancy I am working with came up with a blanket no-Limited-Company rule, so had to switch to an Umbrella, which is what I am using currently.
    I did not see any near term prospects of an outside-IR35 contract, so I kicked off the company closure process later last year. VAT de-registration and Cessation accounts have been completed, and I have appointed a MVL solicitor.

    However, I had a change of role at my client short while ago.
    I have now moved from the IT delivery / implementation team (it was an IT BA role), to the Business team at the same client (role now involves day-to-day risk management, providing new requirements etc).

    Came to know this week that the client may offer a direct (removing the above intermediate consultancy) outside-IR35 contract from Apr-2022.

    In this situation (if the above new Business contract materialises), may I please ask what do you guys think would be the best option for working from Apr-2022 -

    Option 1

    Let the MVL of current IT Company continue. And use a new Limited Company (with a new SIC code) from Apr-2022 for the new contract that I will get on the Business side.

    Few points to consider -
    a) Given that the new role is different from what I was doing through the previous Limited Company, I think that the Condition C of TAAR rules won't apply. So this should be fine?
    b) In fact, when I decided to close the company last year, the main purpose was not tax saving. I was closing the company only because I no longer needed it. So, I think Condition D also should not apply?
    c) And as TAAR rules look at overall history and circumstances, please also note that I used the same Limited Company for 13 years, so I do not have any history of doing a MVL and opening another company.

    How does my position look overall from the viewpoint of this option?

    Option 2

    Halt the MVL of current IT Company (if possible). And use the same existing Limited Company from Apr-2022 for the new contract that I will get on the Business side.

    Few points to consider -
    a) I will need to check whether I can stop the MVL process at current stage.
    b) Even though the nature of work is different now, will it make sense to still use the old IT Limited Company?

    Option 3

    Let the MVL of current IT Company continue. And use an Umbrella Company from Apr-2022 for the new contract that I will get on the Business side.

    Few points to consider -
    a) By working through Umbrella, I will lose the flexibility that outside-IR35 contract offers, so may not be the ideal option I think.
    b) Main advantage of this option though is that it won't have any TAAR related uncertainty.

    Will be much appreciated if you could please share your thoughts.

    #2
    1 doesn't work - the definitions HMRC use for same business are Broad.
    2 unlikely to work

    3 depending on how much you've put into your pension scheme you can put up to £160,000 a year into it (£40,000 from the 22/23 allowance and then go back over the past 3 years).

    Sorry to say this but I don't see any easy fixes here.
    merely at clientco for the entertainment

    Comment


      #3
      Option 4) - ask the MVL practitioner for some help
      Option 5) - complete the MVL but pay dividend tax on the distribution rather than CGT
      See You Next Tuesday

      Comment


        #4
        You are mistaken about Option 1. Yes, you would be squarely caught by the TAAR in that situation. Did you really think that a self-identified SIC would be a workaround? It isn’t.

        Regarding this new contract, it all sounds a bit too hypothetical to base a decision about whether or not you want to run a company. This hypothetical contract may not materialise and it may not be outside IR35 anyway. You are clearly letting the tax tail wag the dog. If you want to pursue outside IR35 contracts, then retain your current company or, at least, retain your ability to open another one by avoiding the TAAR altogether.

        Comment


          #5
          If you've gained a tax advantage from MVL and are going back in to IT in any capacity then you are caught. There is no way around it. You'd be able to make this switch as part of your normal working career regardless of MVL situation so no way it can be a excuse to get around the rules.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Originally posted by eek View Post
            1 doesn't work - the definitions HMRC use for same business are Broad.
            2 unlikely to work

            3 depending on how much you've put into your pension scheme you can put up to £160,000 a year into it (£40,000 from the 22/23 allowance and then go back over the past 3 years).

            Sorry to say this but I don't see any easy fixes here.
            Thanks.

            1. The role change is clear and genuine, but yes, HMRC definition (the use of word "similar") is quite (deliberately) vague. Unfortunately, they don't have a pre-clearance facility either for this, else would have run it past them (there is nothing to hide).

            2. May I please ask why you think this won't work? Do you mean I can't stop the MVL in-between?

            3. Yes, considered that option, and may use a bit of salary sacrifice if I go with this option. But not very suitable in my case, as I have already made the pension contributions that I planned to, in last few years.

            Comment


              #7
              Originally posted by Costa View Post
              1. The role change is clear and genuine, but yes, HMRC definition (the use of word "similar") is quite (deliberately) vague. Unfortunately, they don't have a pre-clearance facility either for this, else would have run it past them (there is nothing to hide).
              I have now moved from the IT delivery / implementation team (it was an IT BA role), to the Business team at the same client (role now involves day-to-day risk management, providing new requirements etc).
              So you were a BA in one team and have now moved in to the business team and will be carrying out analyst type activities. Isn't that as close to a Business Analyst as you can get?

              If you have the skills to move role titles then you are still working in your area of expertise. Doesn't need a vague definition to cover this one IMO. The BA bit aside you are an IT consultant deliver IT consultancy. Role titles are for perms really.

              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Originally posted by Lance View Post
                Option 4) - ask the MVL practitioner for some help
                Option 5) - complete the MVL but pay dividend tax on the distribution rather than CGT
                Thanks.

                Yes, considered those points / options (and few others too).

                In the end, it practically boiled down to the 3 options I listed above. But yes, happy to hear all views.

                Comment


                  #9
                  Originally posted by northernladuk View Post


                  So you were a BA in one team and have now moved in to the business team and will be carrying out analyst type activities. Isn't that as close to a Business Analyst as you can get?

                  If you have the skills to move role titles then you are still working in your area of expertise. Doesn't need a vague definition to cover this one IMO. The BA bit aside you are an IT consultant deliver IT consultancy. Role titles are for perms really.
                  Thanks.

                  Ok, may be my previous description was not very clear.

                  No, I am no longer an IT Consultant delivering IT Consultancy. I have moved over to the Business side, to do a Risk Manager role.

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

                  Please share your thoughts.

                  Comment


                    #10
                    Originally posted by Costa View Post

                    Thanks.

                    Ok, may be my previous description was not very clear.

                    No, I am no longer an IT Consultant delivering IT Consultancy. I have moved over to the Business side, to do a Risk Manager role.

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

                    Please share your thoughts.
                    Same thoughts. If you had the skills to make the move then it's in your skill base. Role is irrelevant but then I'm certainly no expert. We've had at least one other post on this and I will sure we will see more as people try circumvent their knee jerk MVL's over the next two years so will be plenty of examples to discuss I am sure.
                    Last edited by northernladuk; 16 March 2022, 12:51.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment

                    Working...
                    X