Any reason not to consult on the side for a while?

[Burns]

Thanks for the advice everybody. I think I'll go ahead with it alongside permiedom for a while to build up that war chest then if it takes off I'll broach with the current employer about going contractor with them and see if they'd look at replacing me instead.

[DaveB]

Thanks for the advice everybody. I think I'll go ahead with it alongside permiedom for a while to build up that war chest then if it takes off I'll broach with the current employer about going contractor with them and see if they'd look at replacing me instead.

Just remember that if you switch from permie to contractor with your current employer you will be firmly inside IR35.

[MrButton]

Just remember that if you switch from permie to contractor with your current employer you will be firmly inside IR35.

Why?

[northernladuk]

Why?

IR35 was brought in to address Friday to Monday contracting so tell us why not.

[DaveB]

Why?

Because that is what IR35 was specifically intended to address. It was supposed ot prevent employers dodging their liabilities by firing permies on a Friday and bringing them back as contractors on Monday.

The fact that HMRC has seen fit to use it to try and extract extra tax from contractors is in large part the cause of the confusion today.

https://www.contractorcalculator.co....t_is_ir35.aspx

Why was IR35 introduced by the government?

IR35 was introduced to tackle the problem of ‘disguised employment’. This is where organisations engage workers on a self-employed basis and usually through an intermediary, rather than on an employment contract, so they become disguised employees.

This can save the engaging organisation a significant amount of cash as they no longer have to pay employers’ NICs, and it also means they do not have to offer any employment rights or benefits.

A common example is the ‘Friday to Monday’ phenomenon. That is when an employee leaves employment with their employer on a Friday only to return to the same role in the same office on the Monday, only engaged as a contractor or consultant trading through a personal services company and paying much less tax.

[MrButton]

IR35 was brought in to address Friday to Monday contracting so tell us why not.

Understood. But for arguments sake:

It’s possible that he is a permie with working practices wholly outside (except substitution)?

Or doing a different piece of work/gig?

Or working practices change to being wholly outside?

I know in practice it’s likely you’ll be inside. And you’ll be an easy target for HMRC to investigate.

[northernladuk]

Understood. But for arguments sake:

It’s possible that he is a permie with working practices wholly outside (except substitution)?

Or doing a different piece of work/gig?

Or working practices change to being wholly outside?

I know in practice it’s likely you’ll be inside. And you’ll be an easy target for HMRC to investigate.

It really depends on the situation. Yes it is possible to be outside if you take up a different gig that is advertised and you can detach yourself from what you do now and apply yourself as a new entity to the new gig. The way the OP put it though indicates just changing the remuneration method while carrying on doing the same thing. Yes there is quite an assumption there but that's how I, and I assume DaveB read it. There is either a need for a contractor or not. To make one for an employee is just a sham.

[DaveB]

Understood. But for arguments sake:

It’s possible that he is a permie with working practices wholly outside (except substitution)?

Or doing a different piece of work/gig?

Or working practices change to being wholly outside?

I know in practice it’s likely you’ll be inside. And you’ll be an easy target for HMRC to investigate.

Doesn't matter. If they were a permie on Friday and return as a contractor on Monday doing a job that they would otherwise have done as a permie, even if it was not the same one they were doing before, then they are caught. HMRC will look through the contract and go straight for working practices.

[MrButton]

HMRC will look through the contract and go straight for working practices.

And if the working practices are outside then he will be deemed outside.

[cojak]

And if the working practices are outside then he will be deemed outside.

It's a very special employee who isn't under contractual D&C.

If the contract changes but they are still expected to ask for time off, attend company town halls, expect the company to pay for their training, etc, it may be difficult to persuade HMRC that they aren't a disguised employee.

I certainly wouldn't like to stand up to an investigation on the back of it...