Moving from Permie to Contractor

[Wanderer]

Does anyone has experience with moving from permie to contractor within the same company? Has anyone made the jump to contracting this way?

I know lots of people have done it but you're a prime target for IR35 if you do. You are probably better to make a clean break and work somewhere else.

That said, a job is a job.

[Fred Bloggs]

Thanks for your replies!

Does anyone has experience with moving from permie to contractor within the same company? Has anyone made the jump to contracting this way?

There's no problem as long as you declare yourself inside IR35 and pay the NI and income tax. That's the only issue, it's what IR35 is for.

[desnik]

There's no problem as long as you declare yourself inside IR35 and pay the NI and income tax. That's the only issue, it's what IR35 is for.

OK. I don't now much about IR35. Is there any resource clearly defining what makes inside/outside IR35? I have just found discussions and articles about it.

So, is it a rule that starting contracting for the same employer automatically puts under IR35? Even if I set up Ltd, make myself self-employed and contract would be project based and time limited?

[Wanderer]

OK. I don't now much about IR35. Is there any resource clearly defining what makes inside/outside IR35? I have just found discussions and articles about it.

So, is it a rule that starting contracting for the same employer automatically puts under IR35? Even if I set up Ltd, make myself self-employed and contract would be project based and time limited?

No, there is no black and white test for IR35 - that's why people hate it so much. I can tell you that if you have gone from permie on Friday to contractor on Monday with the same employer then this is a red rag to a bull as far as IR35 is concerned.

It's not an insurmountable problem but you will need to get yourself some professional advice from the likes of the PCG or one of the companies which offer IR35 contract reviews to make sure your contract is bullet proof and armour plated. You must be taken on to do a specific project and stick to that (as opposed to working on whatever the client tells you to do IR35:Control), you have the right to subcontract all or part of the work (right of substitution IR35:ROS) and there is no requirement for the client to offer work or for you to work for them (IR35:MOO). Get all these right and you have a strong case for being outside.

Remember that it's also your actual working practices which put you in or out of IR35 too. It's no use having all the good words in the contract if your employer treats you like you are still a permie...

[Fred Bloggs]

OK. I don't now much about IR35. Is there any resource clearly defining what makes inside/outside IR35? I have just found discussions and articles about it.

So, is it a rule that starting contracting for the same employer automatically puts under IR35? Even if I set up Ltd, make myself self-employed and contract would be project based and time limited?

For the purposes of this discussion it is safe to say "yes" to that question.