Offered new contract

[kermitt]

Been offered a new contract direct with Client to go back and do my old permie job which is much closer to home so significantly reducing my travel /accomm costs albeit only 7 months duration with a view to going permanent thereafter. The client is prepared to accept a contractor for the timebeing cos they are in the stink and need help to build the group due to some staff having left but ideally wants a permie.

I have forwarded my Ltd Co contract for them to review (outside IR35) and gave an indication of my rate which thinking I would chance my arm a bit is 20% above my current rate.

Considering my current situation I have 8 months left at current gig before I reach the 24 month limit for claiming expenses and my travelling costs equate to roughly 10% of my current rate (although I do not travel there and back every day). If I stay I may be able to negotiate a better deal to cover the expenses I will be unable to claim and could probably secure another 12 months. However it is boring and would like to move on anyway.

Having given potential client a courtesy call to check on their progress and I was informed that they think my rate is too high and not commensurate with the permie salaries (which I expected them to say anyway). Basically because of the location the earning potential is not as great as the current location and he indicated that they would be expecting to pay me X which is currently 20% down on what I am on just now.

At the moment I could afford to come down 20% to my current rate in order to secure the contract and would still be better off as I would not have the same traveliling costs so this would be my bottom line.
I shall await the negotiations to start and if not to my liking think I may as well stick to my current gig.

[northernladuk]

How can a contract for a position that is contractor to permie be outside IR35??? The words on the contract might make it so but working conditions say otherwise surely.

And do you know for sure you are going to be at your current gig past the 24 month rule? That alone means you should have stopped claiming expenses as soon as you knew it would be over the 2 years?

[kermitt]

My plan is to work the contract as agreed and then once the duration is complete Client will be wanting me to be perm or I walk. The contract has not been written on the basis that I will be a permie after such time just simply that it will expire at a certain date.

I don't know that I will for sure because my current contract takes me to 23 months duration in total of which 8 months remain. There is no guarantee this will be extended beyond 23 months and will of course be subject to another future agreement between Cient Co/ Agency and Ltd Co in which case it will go over 24 months and subject to renegotiation.

[northernladuk]

My plan is to work the contract as agreed and then once the duration is complete Client will be wanting me to be perm or I walk. The contract has not been written on the basis that I will be a permie after such time just simply that it will expire at a certain date.

Regardless of what the contract says if you are filling a permie role you are a hidden employee hiding behind a contract (that won't reflect the actual working conditions if it is outside IR35) so that means you are plainly within IR35 so affecting your revenue calculations or am I mistaken?

I guess it is down to risk aversion if you want to argue you are out of IR35 and go for it anyway or wether you be a pedant and claim yourself inside. I seem to remember a thread where the conses was to always claim your outside anyway.

[kermitt]

Interesting, as far as I was concerned I am simply filling the gapas a contractor but from what you says it may imply that I would be acting as a perma/temp and not legitimately a contractor outside IR35.