Contracting from perm advice

**ladymuck** · 21 August 2020, 22:28

Ok...

If I understand you correctly, you are currently employed but your hours (and I assume salary) have been cut. You are looking to top up your income by taking on extra work.

It seems you want to work for your employer as a contractor? That's pretty much what IR35 was brought in to stop. Unlikely to work in your favour.

The extra gig you could do, assuming that your employment contract doesn't prevent you from working elsewhere.

**northernladuk** · 22 August 2020, 00:44

The person you work for now is your employer, not your client. Even if you change your engagement model you'll be slam dunk inside IR35 so have to go through a brolly so that's not really a great option.

Second issue is will they let you do a second piece of work. Only thing to do is ask them. They maybe really happy with the idea and work with you to make it happen..or more likely will say no.
Before you do anything else you need to ask them.

Then there is the issue if the second client being happy you're tied to your employer. Can't see that going down well at all. Will you even get the gig. A lot of very experience contractors available in the bench so chances of getting the gig are slimblet alone the complications you bring.

Chances of you pulling this off are extremely slim and it working long term even slimmer. There is always the risk of both falling through and you being left with absolutey nothing.

I'd take this situation very carefully and with a lot of thought.

**perplexed** · 22 August 2020, 16:06

Originally posted by jack4568 View Post

I working as a perm for 3 years with the same employer, these days we don't have so much work and i am working around 6 hours a day with a bit reduced salary. Employer says we might have time without any work at all. I found another gig which i wanna do at the same time and want to work as LTD for both clients. Is it possible to do so and won't it fall under IR35? Will be billing by project, have my own equipment, substitution etc...
Another q, how should we calculate what current client will be paying? I will pay VAT from income, so i guess they should be paying me +20% so I get the same money in the end.... will they agree to that? i think they do pay some taxes for me anyway from my salary? any advice pls guys

Where to start?

1) Going perm to contractor and doing same role is inside IR35 and quite frankly the entire reason IR35 came in.
2) View on VAT seems naive but tbh I get the impression you would view your Ltd company income as YOUR income which is a major problem for you.
3) Yes, I'm absolutely sure that your current "client" - and it's employer NOT client - would willingly pay more for your services.
4) Look up NIC et al.
5) Concurrent clients is good and has a lot of benefits but with all due respect, you're a perm not a contractor, I'd suggest there's little chance your employer would want to touch your scheme with a bargepole.
6) In current market conditions, not sure looking to contract is a good idea.

**jack4568** · 22 August 2020, 17:29

so you all mean that there is no way that i was working for an employer, then the circumstances changed and he doesn't need an employee but needs some services sometimes and now i start contracting for him as well as for others?? why everything everyone posts here is inside ir35 according to you?

**northernladuk** · 22 August 2020, 17:58

Originally posted by jack4568 View Post

so you all mean that there is no way that i was working for an employer, then the circumstances changed and he doesn't need an employee but needs some services sometimes and now i start contracting for him as well as for others?? why everything everyone posts here is inside ir35 according to you?

No idea what any of that means. Can someone translate in to English for me please?

**jayn200** · 22 August 2020, 19:02

Originally posted by jack4568 View Post

so you all mean that there is no way that i was working for an employer, then the circumstances changed and he doesn't need an employee but needs some services sometimes and now i start contracting for him as well as for others?? why everything everyone posts here is inside ir35 according to you?

It's possible of course but highly unlikely and it will be on you to explain to HMRC why your situation is different. No information you provided so far has indicated that your situation is different. You're just going from full time employee to part time disguised employment with same employer. You will be subject to IR35. Not only that but even if you can get away with it, come April 2021 your employer/client will be doing determination and they will likely get legal advice which will tell them to put you inside which will likely flag HMRC so you won't get away with it unless you abandon your contract before then and even then you still have some risk but much much less risk.

**perplexed** · 22 August 2020, 19:06

Originally posted by jack4568 View Post

so you all mean that there is no way that i was working for an employer, then the circumstances changed and he doesn't need an employee but needs some services sometimes and now i start contracting for him as well as for others?? why everything everyone posts here is inside ir35 according to you?

You seem a tad chippy.

If you're going back to do exactly the same work but have changed only the way service is provided, ie going from employee-employer to client - ltd company then you'll be inside IR35. Working practices, see - merely changing payment / taxation isn't a defence against IR35. It's to prevent people leaving their employment Friday afternoon and going back Monday morning doing the same work in the same way under different tax / payment structure. You'll be a disguised employee and thus inside IR35.

Contracting "for others" - and even that terminology to me shows you're not necessarily getting the point - is irrelevant. IR35 status is on a contract by contract basis, after all - possible to have an Inside IR35 gig and an outside !R35 gig concurrently. Use common sense - it's possible for perms to have more than one perm job.

People have given you advice and commented based upon many years of experience. You seem to want people to just turn round and tell you that everything you've suggested will lead you to a land of milk and honey. Best advice is that you really, really, really need to do a lot more research before considering what you're suggesting.

Contracting from perm advice