Permie to Direct Ltd Comp (same employer) IR35 opt out?

[milkybarkid99]

Hi all

just happened upon the site and found a multitude of answers to many of my questions except this one so hopefully someone can help.

I have just been offered a contract with my employer after I told them I wanted to leave to go contracting (currently permie).

I am about to set up my Ltd Company and arrange a contract with my employer using a template from the pcg site (direct to client).

From another read post on here, I am now unsure as to if I can opt out of ir35 using this contract to my employer (even with the anyone can be substituted to do the work clause?!?), can anyone confirm where I stand on this as if I cannot opt out I might as well refuse the contact and look elsewhere as the rate will not be high enough.

Many thanks

MBK

[milkybarkid99]

OK, just read another argumentative thread regarding disguised employees, blah blah blah so dont want to get anyone angry with responding.

If it made a difference I am being employed to implemented two projects within a 6 month contract, this is different to the work I have been doing and I will be employing people, managing bods, etc so it is a step away from my usual job.

I have a firm set of deliverables and a finite end to what I have been asked to do.

I know everyone will say different but as I am emigrating to Oz next year and this is the first step in my contracting life, do I really need to worry about being caught if I can have some (if little) substance to support being outside ir35.

Be gentle!

MBK

[malvolio]

If you've read that much, you will know that you can't opt out of IR35 and if you take a job with your ex-employer on much the same overall conditions you are 99% certain to have been caught by IR35, which is primarily what it's all about. And if you're planning on moving out inside a year, your company would probably be seen as a complete tax sham if you tried to put yourself outside IR35 and you would have problems closing it down.

By all means take this fairly pain-free route to start as a contractor, but use an umbrella and don't even think about being outside IR35. It will cost some income (not that much if you get the rate right), but be an awful lot less hassle!

[smee.again]

I also opt out of IR35 please...

[TheFaQQer]

I also opt out of IR35 please...

Me too - do I just need to write a letter to HMRC?

[milkybarkid99]

Thanks for the replies people.

Another point which I am not sure will make any difference, apart this contract I have been asked to design a website for a company which I have not signed or drafted a contract for (not met them yet), if I draft a outside IR35 for this will this not have any positive impact on the ir35 situation with my soon to be new client? (ex-employer)

[max]

If you've read that much, you will know that you can't opt out of IR35 and if you take a job with your ex-employer on much the same overall conditions you are 99% certain to have been caught by IR35, which is primarily what it's all about. And if you're planning on moving out inside a year, your company would probably be seen as a complete tax sham if you tried to put yourself outside IR35 and you would have problems closing it down.

By all means take this fairly pain-free route to start as a contractor, but use an umbrella and don't even think about being outside IR35. It will cost some income (not that much if you get the rate right), but be an awful lot less hassle!

The stated reason for IR35's introduction was to stop employers terminating permis and taking them back on a contract basis. In this case he has chosen to go contracting and his employer has offerred to give him a contract.

Also he has stated the contract assignment is different from his permi role.

To say "99% certain to have been caught" is FUD and "don't even think about being outside IR35"...cripes...get a grip man.

There a very few cases where IR35 certainly(99%) applies. The only one I can think of, is when the contractor actively believes themselves to be an employee, otherwise it is arguable, especially if PCG contract is used(it's never been breached).

It will cost some income (not that much if you get the rate right), but be an awful lot less hassle!

This doesn't make sense. How does one get the "rate right"? The higher the rate, the more it will "cost some income". Are you suggesting you lower the rate, so it doesn't "cost some income"?

[thunderlizard]

I am being employed to implement two projects

If that's the way you think of it, it's an employment-type relationship and IR35 will apply.

[TheFaQQer]

Thanks for the replies people.

Another point which I am not sure will make any difference, apart this contract I have been asked to design a website for a company which I have not signed or drafted a contract for (not met them yet), if I draft a outside IR35 for this will this not have any positive impact on the ir35 situation with my soon to be new client? (ex-employer)

No - IR35 is assessed on a contract by contract basis. So you could have an IR35 caught one, and an IR35 exempt one.