IR35 caught?

[mediocre genius]

I'm making the move from permie to contractor and I've finally got a decent offer but I'm concerned it may be caught by IR35. The contract itself looks OK but the agent has mentioned that the client has a history of offering good contractors permanent roles after 18-24 months, which feels a bit like disguised employment.

Obviously I'm not interested in the permie bit but I'm aware that in a review HMRC will look at working practices and the client's attitude to decide whether or not I'm inside IR35.

I've spoken to an accountant who said it would be fine as the role is very much project based and I have no intention of going permie, but I'm not 100% convinced so it would be good to get a view from the resident experts here.

[Clare@InTouch]

Your status will depend on your working conditions, so concentrate on ensuring the way you work points toward you being outside. Keep proof to show you have control, substitute if at all possible, get stationery and a website in place, keep insurances up to date, don't attend staff training or parties etc.

You could look into getting a Confirmation of Arrangement letter with your direct contact on site, which should help show the reality of the situation if HMRC later quiz someone in HR who didn't know you and says something incorrect.

Join the PCG. Get the contract and working conditions reviewed by Qdos or Bauer & Cottrell.

In short - keep as much proof as possible to show you're outside, regardless of what the client may want in the long term.

[jmo21]

I'm making the move from permie to contractor and I've finally got a decent offer but I'm concerned it may be caught by IR35. The contract itself looks OK but the agent has mentioned that the client has a history of offering good contractors permanent roles after 18-24 months, which feels a bit like disguised employment.

Obviously I'm not interested in the permie bit but I'm aware that in a review HMRC will look at working practices and the client's attitude to decide whether or not I'm inside IR35.

I've spoken to an accountant who said it would be fine as the role is very much project based and I have no intention of going permie, but I'm not 100% convinced so it would be good to get a view from the resident experts here.

It is correct to be wary, but it depends on the client and how they might answer questions in an enquiry (assuming your contract is IR35 friendly and even if you conduct yourself in the correct way to be outside IR35).

I had a client a few years back who was desperate to get a few of the contractors he had to turn permie. None of us did, but the client was an ex-contractor himself so knew how it all worked, and we knew we wouldn't have an issue if it ever came to an enquiry.

For what it's worth, I wouldn't let it stop me taking a contract, but make sure you get the contract reviewed (same advice for any contract really).

[Craig at Nixon Williams]

The best advice that I can give you is to get the contract reviewed by a specialist and ensure that your working practices reflect what is written in the contract.

If you were to have an IR35 enquiry then it is likely that HMRC will want to speak with the end client and their responses are completely out of your control. If you have your working practices aligned to a contract that has been reviewed and passed, and the clients answers reflect this then you should be ok!

Hope this helps!
Craig

[mediocre genius]

Thanks all. So it sounds like it may not definitely be caught, as long as the contract and working practices are right and the client would respond in the right way in a review.

As an aside, if everything did stack up to be outside IR35 but I later decided to go permanent, would that affect the IR35 situation retrospectively, or negatively impact any review? It's not something I'm considering, just curious as it seems to be a well-trodden path for this particular client...

[Craig at Nixon Williams]

As far as I’m aware there are no examples of this happening in practice...but in theory if you went permie and your contract and working practices were the same as they were as a contractor then HMRC could try to use this to their advantage (if they considered it).

Hope this helps!
Craig

[TheCyclingProgrammer]

Everything Clare said, apart from the bit about parties. I wouldn't attend employee-specific events but I certainly wouldn't turn down an invite to the Christmas party if you're still there come Christmas, out of fear of it affecting your IR35 status. You're a supplier, sometimes suppliers and clients get invited to these events. At worst it might give the impression the client thinks of you like an employee, but only *if* no other clients or suppliers are invited.

Its one of those really little things that could only possibly make a difference in a very borderline case. If you have all the main tests covered by your contract and working practices, then you're fine.

If you're being taken on for a very specific project, then make sure that is made clear in the contract. Don't deviate from the scope of the project. If client wants you to work on something else, then that requires a new contract/schedule.

And do join the PCG; it offers lots of resources and will cover your back in the unlikely event you get investigated.