IR35 - Potential client can't fill perm role

[TheBA]

Hi,

I have an interview lined up but I'm concerned about falling inside of IR35. Originally the role was put to me as perm, however, a few days later they would consider contractors due to the lack of perm candidates.

They're also bringing in a perm equivalent for another region of the UK (2 roles in total initially), there may be management responsibilities when the team expands too. Long term the role will most likely be filled with a perm employee.

Even if the working practices are fine (I suspect not) will the above work against me?

Thanks

[SueEllen]

Depends. You need to go to the interview and find out exactly what the client requires.

I've had roles which on reading the agents spec would clearly fall into IR35 however after I've gone to the interview and directly spoken to the client the role is clearly outside and different to what the agent says.

Part of the issue is that some roles have confidentially requirements so the client won't tell the agent exactly what is required on the role spec. This means I've had to then edit the contract, with the help of a legal advisor, to make it clear that the role isn't inside IR35 without the agent learning too much confidential information.

Even if the role is inside IR35 as long as the rate isn't too small and the expenses aren't massive it still may be worth taking it especially if it adds on to your skillset.

[northernladuk]

Yes it will work against you. You are filling a perm role with no known end date so HMRC are just going to see you as a perm under a different remuneration method I. E. A disguised permie.

SueEllen is right it can depend and the client might actually see you as a temporary resource and treat you as such. IMO what's more likely to happen is the client will be happy with you and just role the gig on and on so effectively putting you inside.

It could be possible to be outside but unlike most gig's that start out outside and you just keep the evidence with this one you are going to have to start inside and work hard to proving you are outside. Not a comfortable situation I'd say.

[TheBA]

Thank you SueEllen, NLUK. You have confirmed my concerns.

It's direct with the client so there may be some flexibility in the final spec. There is a clear overall objective for the role - establish, road test and embed a new change framework. Technically, there is an end point with that but I guess the line becomes blurred when it rolls into BAU.

One for qdos?

[northernladuk]

Thank you SueEllen, NLUK. You have confirmed my concerns.

It's direct with the client so there may be some flexibility in the final spec. There is a clear overall objective for the role - establish, road test and embed a new change framework. Technically, there is an end point with that but I guess the line becomes blurred when it rolls into BAU.

One for qdos?

Should be one for QDOS whatever the situation everytime.

[LondonManc]

Thank you SueEllen, NLUK. You have confirmed my concerns.

It's direct with the client so there may be some flexibility in the final spec. There is a clear overall objective for the role - establish, road test and embed a new change framework. Technically, there is an end point with that but I guess the line becomes blurred when it rolls into BAU.

One for qdos?

Make sure you've got defined deliverables and an estimated end date and that any extensions to the contract would be to cover that piece of work, with a new project requiring a new contract.

[Hobosapien]

Wasn't it not long ago that any contract under 6 months would be low priority for HMRC investigations, such that any over 6 months triggered HR to need assurances about IR35? This may only affect the public sector, if accurate or still relevant.

Personally if I was 'desperate' for work and this contract was on the table I'd take it with the caveat that either or both of the following was true and made sure I didn't deviate later:

1. rate was higher to cover being inside IR35. Isn't it generally regarded something like an extra 20% on rate is required to offset being inside IR35. So can then just be inside IR35 and not worry about the extra tax as it's already covered.

2. Only accept a 3 or 6 month contract knowing I was not going to accept a renewal that went over the 6 months. The shorter the contract the better in terms of financial risk or raising one's profile on the HMRC easy pickings list. Many contracts start out short term (i.e 3 month initial period) and there's no obligation to accept any extension offer that may not even come.

Then in the meantime look around for other work in case need to 'jump ship' or not accept renewal once QDOS review of contract and working practices confirm inside IR35.

[TheBA]

1st round down and some further digging brought to light that there is a formal change project/programme behind the role so maybe I'm over thinking things.

Unfortunately, the desired budget won't stretch to my in IR35 rate. Will have to see how this progresses.

[psychocandy]

All well and good saying it could look bad inside IR35 BUT remember, its all irrelevant possibly because

1) Chances of HMRC even looking at it are slim.
2) Chances of HMRC being able to make it stick are slim if you've got IPSE or QDOS cover.

And, end of the day, a contract inside IR35 is still better than no contract <modsnip>

[psychocandy]

Wasn't it not long ago that any contract under 6 months would be low priority for HMRC investigations, such that any over 6 months triggered HR to need assurances about IR35? This may only affect the public sector, if accurate or still relevant.

Personally if I was 'desperate' for work and this contract was on the table I'd take it with the caveat that either or both of the following was true and made sure I didn't deviate later:

1. rate was higher to cover being inside IR35. Isn't it generally regarded something like an extra 20% on rate is required to offset being inside IR35. So can then just be inside IR35 and not worry about the extra tax as it's already covered.

2. Only accept a 3 or 6 month contract knowing I was not going to accept a renewal that went over the 6 months. The shorter the contract the better in terms of financial risk or raising one's profile on the HMRC easy pickings list. Many contracts start out short term (i.e 3 month initial period) and there's no obligation to accept any extension offer that may not even come.

Then in the meantime look around for other work in case need to 'jump ship' or not accept renewal once QDOS review of contract and working practices confirm inside IR35.

Way too cautious IMHO. So you'd not accept a renewal for an otherwise good gig just in case of IR35?

I will admit of course, the longer ones look worse and, of course, there is more to lose. BUT, as you all know, there are good gigs and bad gigs. I certainly wouldnt turn down a guaranteed extension for a good gig just because of IR35 for sure. Admitedly, it might swing things if I was uncertain but not to a huge amount.

But then if you've got gigs offered to you left right and centre then maybe its doable. Just not for me.

Saying that, I've never had QDOS tell me a contract was inside IR35. Working practices would be possibly borderline though.