State of the Market

[Protagoras]

If you are doing the same role inside IR35 (or as a perm) you have an issue. As you have done an outside role which would now be inside, HRMC can argue it should have been inside all along, and taxed accordingly.

Surely this depends on whether the 'outside' engagement was under Ch.8 or Ch.10 rules?

If the role was only ever under Ch.10 rules then any liability would be with the client, absent of course a contact with liability transfer terms.

[Wobblyheed]

Joined first time contracting in sept 2023 after being permi for 18yrs (outside ir35, £650)... got increment in daily rates in between. Now client is asking everyone to go inside IR35! Any known issues before the discussion time comes? joining as employee may also on the table .. what should I factor in (tax implications etc) and what could be potential perm salary?

I got a similar offer just before covid. Perm rate was £70k. Looking back I wish I had taken it. Was a great company to work for.

[siddhantkumar]

If you are doing the same role inside IR35 (or as a perm) you have an issue. As you have done an outside role which would now be inside, HRMC can argue it should have been inside all along, and taxed accordingly.

Spoke with the client and fellow contractor. Although contractor have same reservations as mine, client insisted that they have done all due diligence wrt taxes with experts and going inside will not be an issue. Two years back Shell did similar exercise to overnight change outside to inside. I will wait and see how many of hundreds of contractors chose to go inside.

[Protagoras]

Spoke with the client and fellow contractor. Although contractor have same reservations as mine, client insisted that they have done all due diligence wrt taxes with experts and going inside will not be an issue. Two years back Shell did similar exercise to overnight change outside to inside. I will wait and see how many of hundreds of contractors chose to go inside.

Presumably you have a SDS provided by the client at the start of the 'outside' contract?
My understanding is that a client can issue an updated SDS at any time to change the status as circumstances dictate.

To my mind it would be a matter of concern where the same role was performed for the same client previously, but under Ch.8 rules.

[jamesbrown]

Spoke with the client and fellow contractor. Although contractor have same reservations as mine, client insisted that they have done all due diligence wrt taxes with experts and going inside will not be an issue. Two years back Shell did similar exercise to overnight change outside to inside. I will wait and see how many of hundreds of contractors chose to go inside.

Let me be the first to say . I hope you understand your contract very carefully with regard to (the absence of) any safeguards for the Fee Payer seeking restitution against you, personally, after admitting their mistake under pressure from HMRC and reclassifying the payments as salary, effectively leaving you with a liability for income tax and primary NIC that HMRC are unlikely to care about and may even actively encourage. There are experienced KCs who have speculated along the same lines. There be dragons with Chapter 10, which is why I wouldn't touch a nominally "outside" contract under Chapter 10, whatever the truth may eventually turn out to be.

Also, again, this is the wrong thread, so create another one.

[siddhantkumar]

Let me be the first to say . I hope you understand your contract very carefully with regard to (the absence of) any safeguards for the Fee Payer seeking restitution against you, personally, after admitting their mistake under pressure from HMRC and reclassifying the payments as salary, effectively leaving you with a liability for income tax and primary NIC that HMRC are unlikely to care about and may even actively encourage. There are experienced KCs who have speculated along the same lines. There be dragons with Chapter 10, which is why I wouldn't touch a nominally "outside" contract under Chapter 10, whatever the truth may eventually turn out to be.

Also, again, this is the wrong thread, so create another one.

so safe to assume I should run away from this client I presume permanent position is also out of question.

what's cooling off period? delete {say contract ends and I rejoin after 10-15 days? will that work. Sorry for using this thread but this would be my last query in subject matter.} Just read about friday-monday rule... out of question.

[Bluenose]

what's cooling off period?

5 Years minimum.

Run, dont walk.

[Protagoras]

so safe to assume I should run away from this client I presume permanent position is also out of question.

Whether to run away or not depends on contractual terms and your risk appetite.

For example, you may (should) have had the 'outside' contract reviewed by an appropriate professional, in which case risks should be documented and understood.

It may be that the engagement was only ever under Ch.10 rules and that the contract has no liability / debt transfer provisions.

You need to consider all the factors and decide. It may be that you should engage professional assistance from an IR35 advisory firm to inform this decision, especially if finding alternative work is challenging in the current climate.

As for permie with the same client, this is a common progression. The IR35 risk associated with this is not obvious to me; maybe someone else can elaborate that ...

[ladymuck]

I got a similar offer just before covid. Perm rate was £70k. Looking back I wish I had taken it. Was a great company to work for.

Hindsight is a marvellous thing. You made the decision with the information you had at the time. Absolutely no point in wasting energy on what ifs after the event (not saying you are doing that but humans have a knack for beating themselves up over things they can't do anything about).

[jamesbrown]

As for permie with the same client, this is a common progression. The IR35 risk associated with this is not obvious to me; maybe someone else can elaborate that ...

It's quite straightforward, IR35 is concerned with establishing whether the hypothetical contract between the client and the contractor, personally, looks like one of employment, given the actual working practices. If you are progressing to or from an employed position at the same "client" without a fundamental change in working practices (that is very easily evidenced and documented), then it should be rather easy to establish that the hypothetical contract was indeed akin to employment and, therefore, inside IR35.

Anyway, back to the state of the market... it's still crap