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Question - might not be easy to answer...

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    Question - might not be easy to answer...

    So new company is formed which is to take contractual ownership and consolidate "responsibility" for the subsidiary.

    I left the subsidiary last month as a permanent. Can I apply to be a contractor at the new company without breaching any IR35?

    #2
    For a start you don't breach IR35. Please get a proper understanding as it's very key to the whole situation here.

    It highly depends on the working conditions. If you are coming back to do more or less the same as you did before then it's safe to assume it pretty much inside.

    If you are doing something different, with a different team with a different legal entity then it is possible to avoid being inside by default i.e. you are not a Friday to Monday contractor but you still have to put the work in to make sure you are outside IR35 as you do in any new gig.

    Without knowing more details it's hard to say for sure..

    Just to throw another thing in though, do you not have a handcuff in your perm contract? Not all companies let ex employees come back as contractors due to handcuffs. I don't think the new company will make a difference as handcuffs tend to cover a range of stakeholders, clients, suppliers etc

    With so little information to answer what you admit might be a complex question it's hard to say. I'm guessing this thread is going to go on and on with little snippets of useful information appearing as time goes on as is the norm in these types of posts.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Originally posted by northernladuk View Post
      For a start you don't breach IR35. Please get a proper understanding as it's very key to the whole situation here.

      It highly depends on the working conditions. If you are coming back to do more or less the same as you did before then it's safe to assume it pretty much inside.

      If you are doing something different, with a different team with a different legal entity then it is possible to avoid being inside by default i.e. you are not a Friday to Monday contractor but you still have to put the work in to make sure you are outside IR35 as you do in any new gig.
      The work would be the same, however it would be in a different team (i.e. the team that proposes to take over) so I think I'd be OK.

      Aware of the handcuffs and I think this would be the case if I was going to work back with the subsidiary (which isn't going to happen) as it would be with the company that sits over it.

      A further question is putting in work to show you're outside IR35 other than having your own website, membership of using Regus offices around area etc. are?

      Comment


        #4
        Originally posted by Dhrucku View Post
        The work would be the same, however it would be in a different team (i.e. the team that proposes to take over) so I think I'd be OK.
        I'm not so sure about that. You are still doing the same job. It's going to be very difficult indeed to prove you are not part and parcel and being directed if you are doing the same thing.
        Aware of the handcuffs and I think this would be the case if I was going to work back with the subsidiary (which isn't going to happen) as it would be with the company that sits over it.
        Too complex for me that so I don't know. Doing the same job for the same end result regardless of the overarching company seems to indicate no change so you are getting in to complex area of law I would have thought. I'll pass on this one.
        A further question is putting in work to show you're outside IR35 other than having your own website, membership of using Regus offices around area etc. are?
        Again your statement shows a massive misunderstanding of IR35. It's not a tick box and neither of those really have any impact whatsoever.

        There are plenty of guides on the web, links on the right hand side and tons of discussion on here about it. I suggest you read up on what it is, the main pillars and how you should operate. One of the main ones is Direction and control and associated with that is being part and parcel of the company. Very difficult to change this if you are doing the same thing. You are effectively doing the same work under a different remuneration method which is exactly what HMRC are trying to shut down with IR35.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by northernladuk View Post
          I'm not so sure about that. You are still doing the same job. It's going to be very difficult indeed to prove you are not part and parcel and being directed if you are doing the same thing.


          Too complex for me that so I don't know. Doing the same job for the same end result regardless of the overarching company seems to indicate no change so you are getting in to complex area of law I would have thought. I'll pass on this one.


          Again your statement shows a massive misunderstanding of IR35. It's not a tick box and neither of those really have any impact whatsoever.

          There are plenty of guides on the web, links on the right hand side and tons of discussion on here about it. I suggest you read up on what it is, the main pillars and how you should operate. One of the main ones is Direction and control and associated with that is being part and parcel of the company. Very difficult to change this if you are doing the same thing. You are effectively doing the same work under a different remuneration method which is exactly what HMRC are trying to shut down with IR35.
          Thanks as always northernlad!

          I'll be hunting elsewhere then.

          Comment


            #6
            You’ve been posting on the forum for a little while.

            You need to take more responsibility on understanding IR35. You can do this by reading (as suggested by NLUK) and not by posting questions which are not answerable without significantly more information.

            Comment


              #7
              Ok, first to clarify, it sounds like a new company has been formed and it is going to own the company you used to work for (the subsidiary). You are going to be working for the new company.

              You left the old company in August. You are going to ask the new company to engage you as a contractor (which probably wouldn't start, now, until October). You will be doing a very similar job but with a new team.

              Under that scenario, I would think that the fact that you used to be employed by the company which has been acquired by your new client is mostly irrelevant. This has not been Friday-to-Monday, there's going to have been more than a month off. You were not offered a job when the transition took place, you are contacting the new company and offering your services. There was no transition from the old to the new, no guarantee. You've never been on payroll of the new company, and you don't know that they will take you on.

              You have skills and experience which will make you particularly attractive to the new company, but we all leverage "skills and experience." As a businessman you are offering your company's services to a potential client, that's it.

              In short, I don't think the fact that your potential client has acquired your former employer makes you particularly more likely to fall inside IR35. I think the time off and the fact that you will be working for a completely new entity rather than your former employer probably mostly removes the Friday-to-Monday factor.

              But IR35 is still going to be determined by (secondarily) the contract and (primarily) the working practices. And what you've described does probably put you at greater risk than most of, as NLUK says, being seen as 'part and parcel' and being under Supervision/Direction/Control. So you are likely to be at high risk on IR35.

              So that gives you two options. One is to just operate inside IR35 and charge sufficient fees to cover you for the extra taxes as well as the lack of employment rights, holidays, pension, etc. The other is to become very knowledgeable about IR35 FIRST, and make a proposal that includes specific provisions to keep you outside IR35. Get the working practices and contract right, and go for it.

              Comment


                #8
                Thanks all for the replies, I propose an end to this discussion here.

                Comment


                  #9
                  You could get your contract and if you know them, your working practices over to QDOS and pay 90 quid for a full review and see what they way. They are the professionals here and you'll have to give them the full picture so they are in a better position to give you an answer than we are.

                  If it fails you've lost 90 quid. No biggie.
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

                  Comment

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