First contract - caught by IR35?

[LisaContractorUmbrella]

I will pretty much be doing the same work. I work on one main project but I'll be branching a bit onto a different project. I'll be working on the 2 projects and when they finish, I'll be doing other projects if all goes well. I don't think I could send a substitute because they would need to be trained. I am not obliged to stay. The company said I can agree to either a month's notice or a week's notice.



Can you recommend a specialist? How could I find a specialist? I haven't got a contract yet. It was a verbal chat with my old boss. Rate, hours, work, etc.

Is there a way I can get the contract worded so I don't get caught by IR35?

Yes.

Based on what you have told us here I would say that you will be inside IR35 at least until you start on a new project

[heyya99]

The PCG have a great contract that would be deemed outside IR35, but only if it's backed up by working practices. A written contract that's a fabrication (a sham - google Autoclenz for a recent case where this happened) isn't worth the paper it's printed on.

Google IR35 specialist to find an accountant who will review your contract and talk you through the legislation (some even advertise on CUK). It does sound like you're not on a good footing to be honest - what made you change from employee to contractor? Presumably your rate went up enough to compensate you for the lack of sick pay & other benefits....?

I initially quit because I wanted flexibility and to make more money. A week later I got offered the chance to go back. Before tax I have roughly doubled my wages.

I now have a dilema of accepting my old companies offer and paying big tax, or continuing to look for another contract with a new company.

[LisaContractorUmbrella]

I initially quit because I wanted flexibility and to make more money. A week later I got offered the chance to go back. Before tax I have roughly doubled my wages.

I now have a dilema of accepting my old companies offer and paying big tax, or continuing to look for another contract with a new company.

If you have doubled your pre-tax earnings being inside IR35 won't necessarily make you worse off than when you were a permie - a contractor has to allow for 13.8% for employer's NI and the cost of an umbrella company or an accountant but your extra income should cover that

[Clare@InTouch]

I initially quit because I wanted flexibility and to make more money. A week later I got offered the chance to go back. Before tax I have roughly doubled my wages.

I now have a dilema of accepting my old companies offer and paying big tax, or continuing to look for another contract with a new company.

Even if you're inside IR35 you should still make more than you would have as an employee - 95% of your income has to be paid as wages, but you can reduce this by paying into your pension. It might still be worth doing if it's short term.

[heyya99]

If you have doubled your pre-tax earnings being inside IR35 won't necessarily make you worse off than when you were a permie - a contractor has to allow for 13.8% for employer's NI and the cost of an umbrella company or an accountant but your extra income should cover that

I'm not looking to make a bit extra. I took the risk and quit to make considerablly more. Now it seems like it wasn't worth it..

Am I right in saying I should not accept my old company's offer and look for a fresh role?

[malvolio]

I initially quit because I wanted flexibility and to make more money. A week later I got offered the chance to go back. Before tax I have roughly doubled my wages.

I now have a dilema of accepting my old companies offer and paying big tax, or continuing to look for another contract with a new company.

That's before tax, before insurances, before accoutnancy costs, before training, before pension and SSP contributions and before unpaid days off (you'll lose five days pay over Christmas for a start). Sorry mate, potentially you've been screwed. You've given up a shedload of employee privileges and saved your ex-employer a lot of moeny for no discernable benefit.

If you're doing much the same work you will be inside IR35, by definition, so you're finacnial position just got 20% worse. You can work for ex-employers but it has to be on a proper No Direction, minimum MOO basis and in a differnt role. Doesn't sound like you would qualify for that one.

Best bet if you want to stay with ex-employer is go Umbrella, then look for a proper contract and learn how it all works. Start with the PCG's Guide to Freelancing: as I keep saying, you have no idea how much you don't know.

Better still, if you have the skills, is to look for a real contract anyway. Although there's a lot pf competition out there so make sure you know what a contractor's CV looks like.

[TheFaQQer]

I'm not looking to make a bit extra. I took the risk and quit to make considerablly more. Now it seems like it wasn't worth it..

That was a mistake then. Being attracted by the daily rate is a fools errand - just wait until you are benched, or are ill, and have no income coming in. You factored that all into your calculations, yes? You've added up the insurance, accountancy, NI, taxes etc. and know what you are doing, of course. And you've checked out what IR35 means and how to run a business. Of course you have.

It's all about the money is not a sensible mantra to have, really.

Am I right in saying I should not accept my old company's offer and look for a fresh role?

What makes you think that anyone on here has any concept of what is right and what is not for you? No-one here can give you any meaningful advice on what to do, because no-one here knows who you are or what you need to live on or what you want to be doing.

Given that you don't seem to realize this basic idea, are you sure that contracting is really the world for you to be in? From the looks of you, I'd recommend begging your previous employer to take you back as a permie and plead temporary insanity.

[northernladuk]

What makes you think that anyone on here has any concept of what is right and what is not for you? No-one here can give you any meaningful advice on what to do, because no-one here knows who you are or what you need to live on or what you want to be doing.

Given that you don't seem to realize this basic idea, are you sure that contracting is really the world for you to be in? From the looks of you, I'd recommend begging your previous employer to take you back as a permie and plead temporary insanity.

I think we can. I think you last paragraph is the perfect advice for the OP.

[heyya99]

Can anyone tell me the correct conditions that make going perm to contract worthwhile?

Admittedly, I have not done much research but I have no dependants or own a house. I'm young.

You all seem to think I did the wrong thing, but given I have quit now and want to do contracting, what is my best route? If going perm tp contract is so silly, why does anyone do it? In my old job the only benefits I got was a gym subscription and obviously holidays and sick pay. I got no health insurance or pension.

The responses on this have confused me.

[northernladuk]

Can anyone tell me the correct conditions that make going perm to contract worthwhile?

Admittedly, I have not done much research but I have no dependants or own a house. I'm young.

You all seem to think I did the wrong thing, but given I have quit now and want to do contracting, what is my best route? If going perm tp contract is so silly, why does anyone do it? In my old job the only benefits I got was a gym subscription and obviously holidays and sick pay. I got no health insurance or pension.

The responses on this have confused me.

Why do you want to go contracting bearing in mind you don't appear to understand the basics. Give us a clue on what you are after and we can tell you if it is achievable.