Contractor to perm?

[b0redom]

I, personally, would worry way more about going the other way - ie perm to contract at the same place. It's not massively uncommon for folks to be working at one place as a supplier and then be onboarded to the client. Its so common that in some cases, the suppliers have non-compete clauses in their contracts with clients to stop it happening.

If you're inside IR35, then it's not a problem as has already been stated.
If you're outside IR35, then you're probably going to wrap up your company anyway, so it would probably be a non-issue.

YMMV IANAL etc.

Personally though, I couldn't stomach being a permie at a big corp.

[northernladuk]

I, personally, would worry way more about going the other way - ie perm to contract at the same place. It's not massively uncommon for folks to be working at one place as a supplier and then be onboarded to the client. Its so common that in some cases, the suppliers have non-compete clauses in their contracts with clients to stop it happening.

It's not but that's different to a contractor. The employees of a supplier are either TUPEE'd across or give permission to apply for and join the company. It's an employee of a supplier to employee of client so no change in their tax treatment. The issue is an outside IR35 person to employee is a different tax model and that's where HMRC don't like it. The number of contractors going perm is definitaly uncommon in the bigger picture. Your original statement is comparing apples and pears.

[ensignia]

I'd say there is almost no risk in doing this.

1000s of people have done this and HMRC doesn't care. I doubt they'll bother - I think their end game was to get everyone on PAYE and these rules acted as a deterrent rather than proper legislation they intended to follow through with. Most companies are blanket PAYE now so it's done what it's needed to do.

I suppose there is a risk of HMRC randomly investigating a few LTD co directors, but I just don't think it'll happen.

Many on here have been completely beaten into submission by HMRC (and their own minds), and think they are watching your every move but the truth is they are a lumbering, bureaucratic and outdated organisation.

Some of the things I've heard and seen from your average contractor would have the people on here having aneurysms, but the truth is most contractors (outside us oddballs here) are disguised employees and see themselves as no different to FTEs and see the two as completely interchangeable.

A bit off topic but here are a few examples I've experienced recently of contractors being dolts:

- A contractor liquidated his company via MVL in Dec '22, opened a new one doing the same thing in October '23 and then liquidated that in April '24 when his gig ended!

- A contractor had an OIR35 gig for 6 months, during month 4 they applied for the equivalent perm role directly with the company and got it. They are now an employee of this company they were engaged with through an agency only a few months prior, doing the exact same thing. They have also now liquidated their company and brought in their partner as a referral (for a perm BA role) who was a 50/50 shareholder in that company.

- All the contractors on my team at an IB are still at that IB (according to LinkedIn) doing the same roles but as FTE. They swapped over to perm in May 2020. 4 years ago, and I think it's fair to say HMRC haven't taken an interest.

- A contractor I work with (OIR35), goes to the client office 3 times a week (no one asks him to) to try and ingratiate himself with stakeholders in order to get a permanent position. They attend all company events, insist on 1-to-1s and OKR tracking and have their own dedicated desk in the building. They refer to themselves as an employee of the end-client.

These are all recent examples of your average contractor just in the last 6 months I've been at this gig, but the TLDR; summary is you tell your "colleague" to crack on if it's the job they want and not to worry about the mythical HMRC bogeyman - there are 1000s upon 1000s of these types of people in the queue ahead of him to be investigated.

[wattaj]

I'd say there is almost no risk in doing this....
...TLDR; summary is you tell your "colleague" to crack on if it's the job they want and not to worry about the mythical HMRC bogeyman - there are 1000s upon 1000s of these types of people in the queue ahead of him to be investigated.

Thanks. Interesting perspective. I'll pass that on. Appreciated.

[sreed]

I'd say there is almost no risk in doing this.

1000s of people have done this and HMRC doesn't care. I doubt they'll bother - I think their end game was to get everyone on PAYE and these rules acted as a deterrent rather than proper legislation they intended to follow through with. Most companies are blanket PAYE now so it's done what it's needed to do.

I suppose there is a risk of HMRC randomly investigating a few LTD co directors, but I just don't think it'll happen.

Many on here have been completely beaten into submission by HMRC (and their own minds), and think they are watching your every move but the truth is they are a lumbering, bureaucratic and outdated organisation.

Some of the things I've heard and seen from your average contractor would have the people on here having aneurysms, but the truth is most contractors (outside us oddballs here) are disguised employees and see themselves as no different to FTEs and see the two as completely interchangeable.

A bit off topic but here are a few examples I've experienced recently of contractors being dolts:

- A contractor liquidated his company via MVL in Dec '22, opened a new one doing the same thing in October '23 and then liquidated that in April '24 when his gig ended!

- A contractor had an OIR35 gig for 6 months, during month 4 they applied for the equivalent perm role directly with the company and got it. They are now an employee of this company they were engaged with through an agency only a few months prior, doing the exact same thing. They have also now liquidated their company and brought in their partner as a referral (for a perm BA role) who was a 50/50 shareholder in that company.

- All the contractors on my team at an IB are still at that IB (according to LinkedIn) doing the same roles but as FTE. They swapped over to perm in May 2020. 4 years ago, and I think it's fair to say HMRC haven't taken an interest.

- A contractor I work with (OIR35), goes to the client office 3 times a week (no one asks him to) to try and ingratiate himself with stakeholders in order to get a permanent position. They attend all company events, insist on 1-to-1s and OKR tracking and have their own dedicated desk in the building. They refer to themselves as an employee of the end-client.

These are all recent examples of your average contractor just in the last 6 months I've been at this gig, but the TLDR; summary is you tell your "colleague" to crack on if it's the job they want and not to worry about the mythical HMRC bogeyman - there are 1000s upon 1000s of these types of people in the queue ahead of him to be investigated.

This this and this. Couldn’t agree more! 👏