IR35 Advice

[chrisox]

Hi there

I wondered if I could get some advice please regarding a contract I have been offered. The offer is from a previous employer. I was a permanent employee of theirs just over a year ago they initially asked me to stay on for 3 months as a contractor which I did and paid full tax and NI(i.e. inside IE35). Now after contracting for another client they have asked me to come back again for 4 months to work on a specific project(it is not my old job, just need me as a developer and for my knowledge of the business). They are very flexible so I can work from home if required, can write my own contract(within reason of course) and will sign anything I need them to.

I called the HRMC confidential line and spoke to them and although the chap was very nice he basically said they wouldn't know unless they reviewed the contract after I signed it but the issue is that I have other options through another client who I was never a permanent employee so I really need to know or cover myself.

Just to give you more info I am a LTD company, I have other clients but hardly get any money from them, I have a home office, accountant, business cards, website, VAT registered and I pay myself £25k per year of actual salary and the rest dividends. So I am not trying to beat the tax man just trying to get my business sustainable.

So I suppose my questions are what do people think in terms of being inside IR35 for this contract and is there any way to get something drawn up for definite in terms of contract etc so I know where I stand i.e. IR35 proof contact?

Many Thanks

Chris

[malvolio]

Hi there

I wondered if I could get some advice please regarding a contract I have been offered. The offer is from a previous employer. I was a permanent employee of theirs just over a year ago they initially asked me to stay on for 3 months as a contractor which I did and paid full tax and NI(i.e. inside IE35). Now after contracting for another client they have asked me to come back again for 4 months to work on a specific project(it is not my old job, just need me as a developer and for my knowledge of the business). They are very flexible so I can work from home if required, can write my own contract(within reason of course) and will sign anything I need them to.

I called the HRMC confidential line and spoke to them and although the chap was very nice he basically said they wouldn't know unless they reviewed the contract after I signed it but the issue is that I have other options through another client who I was never a permanent employee so I really need to know or cover myself.

Just to give you more info I am a LTD company, I have other clients but hardly get any money from them, I have a home office, accountant, business cards, website, VAT registered and I pay myself £25k per year of actual salary and the rest dividends. So I am not trying to beat the tax man just trying to get my business sustainable.

So I suppose my questions are what do people think in terms of being inside IR35 for this contract and is there any way to get something drawn up for definite in terms of contract etc so I know where I stand i.e. IR35 proof contact?

Many Thanks

Chris

Discrete piece of work unrelated to your previous employment, minimal D&C... Why would this be anywhere near to being inside IR35? Don't believe the taxman either, they don't know themselves and have a slight bias anyway.

Go to Home | IPSE and get one of their contracts: they're about as good as you'll find anywhere. And think about joining while you're there.

[TykeMerc]

I'd say this sounds like it's on safe ground in IR35 terms, so long as the contract is worded sensibly and the working practices are in accordance with the sensible wording.

Malvolio may like to advertise IPSE (former PCG) membership at every opportunity and there's an argument that the IR35 insurance inherent to the membership is value for money, but make your own judgement on that.

[jamesbrown]

Ordinary rules apply, have the contract and working practices reviewed. On the face of it, I agree with malvolio that the prior engagement is irrelevant and you will have sufficient control over the contractual terms and working practices to ensure that you can get this right, i.e. a lack of D&C, a lack of MoO and an appropriate RoS.

[chrisox]

Thanks for the advice guys, I think I am going to take it and will look into joining IPSE

[malvolio]

Reviews are for agency-provided contracts. The whole point of the IPSE contracts is that they don't need to be reviewed. They were drafted by Lawspeed to meet all the relevant criteria for both IR35 and, rather more importantly, commercial risks. The challenge is to ensure your working practices do actually align to the contract.

And you can't buy the equivalent of IPSE Plus cover for anything even close to £240 a year. Ignore the rest of it, it makes perfect commercial sense.

[jamesbrown]

And you can't buy the equivalent of IPSE Plus cover for anything even close to £240 a year. Ignore the rest of it, it makes perfect commercial sense.

Agreed, ignore the rest of IPSE

Also, I don't agree with you in terms of reviews, indeed for precisely the same reason that contract-only reviews are insufficient. The IPSE contract provides a shell only (especially w/r to lack of D&C). Stating something in a couple of sentences is rather different than understanding the implications.

[malvolio]

Agreed, ignore the rest of IPSE

Not actually what I said, but never mind.

Also, I don't agree with you in terms of reviews, indeed for precisely the same reason that contract-only reviews are insufficient. The IPSE contract provides a shell only (especially w/r to lack of D&C). Stating something in a couple of sentences is rather different than understanding the implications.

The IPSE contract is sound, provide you back it up with a mutually agreed Real Arrangements letter confirming how the engagement will work on the ground: there's a template for that on there as well. There's also detailed checklist (sadly, members only,...) explaining everything to consider.

If you can use that contract you've already recovered the cost of your first year membership in drafting and review costs...

[TykeMerc]

Malvolio, quick question, do you get a commission for each person you induce to join your pet organisation from CUK? You advertise it often enough and push membership at every conceivable opportunity.

Maybe you should come out as having a commercial interest and get your user ID changed appropriately.

Incidentally to the OP, while ISPE does have a couple of arguable plus points in a contract blank (well a couple of them) and an insurance that comes with membership, not all of us feel as an organisation it's done any good for the contractor community and it certainly did a lot of harm with the Opt Out debacle.
There's more than a few expressing reservations about their current agenda and direction of travel since their re-branding too, don't get carried along by hype.

[v8gaz]

Malvolio, quick question, do you get a commission for each person you induce to join your pet organisation from CUK? You advertise it often enough and push membership at every conceivable opportunity.

Maybe you should come out as having a commercial interest and get your user ID changed appropriately.

Incidentally to the OP, while ISPE does have a couple of arguable plus points in a contract blank (well a couple of them) and an insurance that comes with membership, not all of us feel as an organisation it's done any good for the contractor community and it certainly did a lot of harm with the Opt Out debacle.
There's more than a few expressing reservations about their current agenda and direction of travel since their re-branding too, don't get carried along by hype.

I can confirm that Mal could get paid* for intros via the member get member scheme, but doesn't.

*in amazon or apple vouchers