Contract Work for my exisiting company whilst on annual leave and IR35

[midnite70]

I am leaving permanant employment on the 30th March but for my last few days will actually be on annual leave.

My current company has offered to buy some holidays off me so that I can spend a couple of days doing some handover work.

This is fine with me but I know the payroll has been run and if I take the payment as an employee this may be accounted for in the new tax year and I would rather keep that clean and only have tax going through from my company.

I was thinking that I could use a letter of engagement via my new company to do this 2 days worth of work, invoice the work and have my permanent employer pay my business.

The question is however that whilst there will be a quotation with a letter of engagement and terms, a purchase order for the work and an invoice from my company how do you think this may sit from an IR35 perspective as legally I am still employed by the company whilst I conducted the work?

Any ideas?

[Clare@InTouch]

I think you'd be subject to IR35 - you're working for your old employer doing the same job you were doing before. In that case 95% of the income you get from the contract needs to be paid as wages. You just need to get a payroll scheme in place for your new company now, and make a one off salary payment to yourself for March.

[northernladuk]

I can't think of many better examples of exactly what a 'hidden employee' is and exactly why we have IR35.

Just do the two days, wave your permie world goodbye and start contracting. Don't be buggering about like this for the sake of 2 days.

[midnite70]

Cheers for the replies, I thought that I would be on a sticky wicket with this but thought that I would double check

I think that I will ask my employer to do an additional pay run into March and try to keep it all as clean as possible.

[scooby]

I can't think of many better examples of exactly what a 'hidden employee' is and exactly why we have IR35.

Just do the two days, wave your permie world goodbye and start contracting. Don't be buggering about like this for the sake of 2 days.

This is worst than my situation!! At least me going back to my old employer was for specialism of skills which they lack, D&C is mine, Sub is poss, and MOO is a definite especially as a lot of what Im doing is bid work, and if the bid is lost, I go my own way.

This guy is going back to "handover" his own old job. I agree with NLUK, but I'd do this as a perm and wait for the next pay run to get your money, just make sure you get the commitments to agreed buy back which is normal permie acts. DONT do it as a freelancer, it just isnt worth the arsing around for 2 days.