Employee to Contract

[ResistanceFighter]

Hear this out before immediately replying "absolutely not".

• Did 2 days work for a client on an Outside basis.
• On the basis of that initial work, the project was kicked off
• Was offered a full time role as an employee, took it due to market conditions
• This has all been direct, no agency involved
• 2 months in, effectively been working as an outside contractor
• Client has turned around and said it should have been on a contract basis the start, and want to switch
• Client went though CEST tool - Outside determination
• Client is not classed as a small organisation due to number of employees & turnover, so liability is with them, and they know this and still seem keen

based purely on that last point is the only reason why I'm asking the question here and entertaining the idea, what do you think?

[dsc]

Here this out before immediately replying "absolutely not".

• Did 2 days work for a client on an Outside basis.
• On the basis of that initial work, the project was kicked off
• Was offered a full time role as an employee, took it due to market conditions
• This has all been direct, no agency involved
• 2 months in, effectively been working as an outside contractor
• Client has turned around and said it should have been on a contract basis the start, and want to switch
• Client went though CEST tool - Outside determination
• Client is not classed as a small organisation due to number of employees & turnover, so liability is with them, and they know this and still seem keen

based purely on that last point is the only reason why I'm asking the question here and entertaining the idea, what do you think?

So you were outside, went perm and now they want you outside again?

Seems to me like they are trying to get rid of you as a permie as they want to get rid of you as soon as the project is done (or enters some particular stage).

I'd say fook em and stay perm considering the current market.

What's the money like?

[sreed]

Doesn’t sound like something HR would sign off on in a large org!

As above, it sounds like they wanted to lock you in with a perm contract at some point in the past and now no longer want/need that so would like to go back to a flexible arrangement.

If they’re bumping up your pay significantly when changing from perm to contract and you’re happy with a change from perm to contract, I don’t see an issue.

[sadkingbilly]

So you were outside, went perm and now they want you outside again?

Seems to me like they are trying to get rid of you as a permie as they want to get rid of you as soon as the project is done (or enters some particular stage).

I'd say fook em and stay perm considering the current market.

What's the money like?

and get canned right away? - first six months perm you have few rights.

[dsc]

and get canned right away? - first six months perm you have few rights.

Yeah I guess that is also possible...hard to say anything smart without knowing how much work there is. The fact they want a flexible arrangement tells me they want the job done and the job doer gone asap, otherwise they would be fine with perm. On the other hand, who the hell signed this off?

[jamesbrown]

liability is with them

This is theoretically true. Whether it is practically true is harder to say. Make sure there aren't any clawback clauses in the contract. Also, in the worst case scenario, cross your fingers that they don't collapse under scrutiny and attempt to argue that they made a PAYE error and ask for that error to be fixed by HMRC retrospectively, as it would be when an employee pays incorrect tax (making you personally liable).

Personally, I wouldn't touch an outside contract under Chapter 10, only Chapter 8, especially in the circumstances you describe, but YMMV (as long as you understand the risks and you're happy with any mitigation).

[northernladuk]

• 2 months in, effectively been working as an outside contractor
• Client has turned around and said it should have been on a contract basis the start, and want to switch

The lines between a flexible hybrid employee and a contractor can be grey I'll admit but there is much more to an outside determination than they way you work. You could turn it on it's head and say the employee working conditions now reflect an outside contractor not that you are working like an outside contractor, but that's still a flawed argument. You don't have RoS, there will definitely be MoO and I'm pretty darn sure somewhere you'll be under D&C so although you are drafting in and out when you want you most certainly are NOT working as an outside contractor. If you can't see this then you don't fully understand outside working which isn't a good thing.

In my uniformed and usually wrong opinion this is likely budgetary and nothing else. You shouldn't have been on head count and should have been paid for by the project and nothing more. That fact alone blows an outside determination. You are doing exactly the same but under a different budget. I'd also say they either don't understand the CEST tool or are fudging it to get the outcome they want. IMO Couldn't be more inside... but as pointed out it's not your risk.... or is it?

[ladymuck]

One way to manage it is to take the gig but put it through a brolly that understands this is a type of contract you can claim expenses against. You can then put a load of cash into your pension if that's useful / practical to trim down the tax bill further.

I'd be inclined to get everything in writing, signed by someone with the authority to sign on behalf of the company. That'll get legal involved who will most likely put the kibosh on it.