Moving from contract to permie - same employer

[timmyc]

In six months time, I will have been contracting at Acme Co for 2 years.

At around this time I expect Acme will offer/force me to join them on a permanent basis, as HR have rules on the employment of long term contractors. I would not be against the idea due to my increasing concerns around my IR35 status and other personal circumstances.

If I close MyCo Ltd to work for Acme as a permie and apply for taper relief on MyCo's profits, is the revenue going to call foul?

Tim

[fckvwls]

In six months time, I will have been contracting at Acme Co for 2 years.

At around this time I expect Acme will offer/force me to join them on a permanent basis, as HR have rules on the employment of long term contractors. I would not be against the idea due to my increasing concerns around my IR35 status and other personal circumstances.

If I close MyCo Ltd to work for Acme as a permie and apply for taper relief on MyCo's profits, is the revenue going to call foul?

Tim

No, you will be fine.

[deckster]

No, you will be fine.

Seeing as you mentioned it, it will however be a red rag to a bull in terms of HMRC challenging your IR35 status.

[northernladuk]

I would guess that if the role ur doing can just become a permie one like that then your well within IR35 unless you have a very well written contract.

I think you need to elaborate about 'cry foul' though. I think the first poster is saying it's fine to do that, the second poster is saying yes you can but it's not going to get you out of the crosshairs for IR35 people. Your still eligible to be investigated for a number of years after. Just cause you have gone permie doesn't wipe the slate clean.

I would have thought as poster 2 says by changing your circumstances you have more chance to get flagged than if you leave and take another contract somewhere else. You almost admitting to them you were a hidden employee by going permie.

This is all hypothetical I must add but just applying some common sense.

[GreenerGrass]

You could pile the whole of your remaining company funds (excluding outstanding corp tax and VAT of course) into a SIPP as company contributions.
You could still get IR35 investigated but less for them to claw back, so less worth their while to pursue.

P.S. Would the people assessing your taper relief application automatically know you had joined the company as a permie, or would they have to speak to another department to find this out? Just wondered if it would be automatically flagged up or not.

[BolshieBastard]

In six months time, I will have been contracting at Acme Co for 2 years.

At around this time I expect Acme will offer/force me to join them on a permanent basis, as HR have rules on the employment of long term contractors. I would not be against the idea due to my increasing concerns around my IR35 status and other personal circumstances.

If I close MyCo Ltd to work for Acme as a permie and apply for taper relief on MyCo's profits, is the revenue going to call foul?

Tim

This is exactly what HMRC and IR35 was intended to do, force you back to permiedom.