From Permanent To Contract

[lje]

Hi everyone...newbie here!

Just wondering what everyone else would choose to do if they don't increase the rate by 20%. Would you stay and contract inside IR35, or leave and get more money? If i stayed, would i be more likely to get investigated when i move to a different contract and declare i'm outside?

Any advice / comments would be much appreciated.

The_Oracle.

You need to weigh up other factors in addition to the ones you mentioned. Is your current employment much closer to home? How likely are they to cancel the contract? How long will they take to pay? How financially secure is your current company and the agency you have the alternative opportunity with?

If they won't give you the extra 20% then you'll need to look at your income levels and all of the other factors and come up with the right answer for you. I wouldn't contract outside of IR35 if I was staying at a company where I was currently a permie. If I went back to a company I used to be permie at then I would treat it differently but keeping your role and changing to contracting is IR35 caught IMHO.

As far as I know the fact that your first contract is within IR35 and your second isn't wouldn't open you up for an investigation - but then I'm far from an expert.

[TheFaQQer]

As far as I know the fact that your first contract is within IR35 and your second isn't wouldn't open you up for an investigation - but then I'm far from an expert.

It shouldn't, but nobody really knows the criteria that HMRC use when deciding whether to investigate or not!

There are plenty of examples of people who do work inside of IR35 and outside at the same time - IIRC, directors of the PCG are an example, as they are outside IR35 for their main work, but inside for work they do for the PCG.

[worzelGummidge]

The great bit snot Goblin and his mad clan will not be around for very much longer so go for it.

Do you really think that the Tories take any notice of IR35 when it takes more money to administer it than it takes in new tax revenue. They will just let it whither and die. There are much more important things to bet getting on with like keeping the country from going bankrupt.

[TheFaQQer]

The great bit snot Goblin and his mad clan will not be around for very much longer so go for it.

Do you really think that the Tories take any notice of IR35 when it takes more money to administer it than it takes in new tax revenue. They will just let it whither and die. There are much more important things to bet getting on with like keeping the country from going bankrupt.

If that were true, then they would have no qualms in stating categorically that they would scrap IR35.

Of course, that might actually require (gosh) some kind of statement from Cameron about what they WILL do rather than the usual mantra of what they WON'T do.

In the past, shadow chancellors (possibly Let win?) said that they would scrap IR35, but that's no longer the party line.

[Fred Bloggs]

If that were true, then they would have no qualms in stating categorically that they would scrap IR35.

Of course, that might actually require (gosh) some kind of statement from Cameron about what they WILL do rather than the usual mantra of what they WON'T do.

In the past, shadow chancellors (possibly Let win?) said that they would scrap IR35, but that's no longer the party line.

Correct, there'll be no vote from me until they put scrapping IR35 in the manifesto.

[d000hg]

Correct, there'll be no vote from me until they put scrapping IR35 in the manifesto.

Maybe they're trying to think up a viable alternative... scrapping IR35 is all well and good but despite the mess they made of it, it exists for a reason. Fixing the underlying problem that self-employed individuals are pushed into setting up companies is the right solution, not trying to fix the tax inconsistencies such a situation generates.

[London75]

You also can't judge success of IR35 on the court wins or the estimate of cost to administer. What you can't total is the number of people who go PAYE out of fear or hoping for an easy life.

For every 10 new contracters, I bet 6 or 7 go straight to a brolly for a while just to get started and have an easy life, after a year probably half of those will go limited (I'm guessing here but that feels right from experience with friends etc).

I know I went brolly for a three months while I found my feet even though I'm far from caught by IR35. In hindsight that was stupid but I was, and still am, new to the contracting game. Even now, I sometimes wonder if life would be easier going PAYE with my own company, then I remember all the extra cash! When you factor in the clampdown on self cert mortgages, it's maybe irrelevant how many they've caught, it's how many they've deterred.