Trading on a PO basis without formal contract?

[TheoJones]

Looking for some "gut feel" advice from the collected minds please -

I find myself in a classic Friday/Monday situation.

2 years as a permie, I gave notice and wanted to leave, they pleaded and made a suitably good day rate offer... and for a month I have worked on the basis of a purchase order for a number of "call off consultancy" days at a day rate. Other than that, it's subject only to the Standard Ts and Cs on the PO.

I went for this because it sounded to me like the absolute epitome of the "purchase of a service" rather than "hiring a person", and for a month, I'm reasonably sure HMRC won't be that interested.

Of course, that's another month and another enticing offer has been made, except that now I have the HR drones (who I have managed to avoid for a few weeks) making noises about a contract instead, assuring me that it will be IR35 friendly. They use a few contractors, so familiar with the issues.

so, the question - am I kidding myself that a PO based arrangement is IR35 safe, or would I be better to dig my heels in and insist that I keep working on a PO basis only?

[cojak]

Take from us, HMRC WILL be interested. You're fooling no-one but yourself.

The client doesn't care, so they'll tell you anything to get you working for them. But they'll be right about it being IR35 friendly, HMRC will love it.

You've just got to hope that the Eye of Mordor doesn't notice you because if it does you're stuffed.

[jamesbrown]

Yes, you're kidding yourself, I'm afraid. IR35 is as much (more) about working practices as having a compliant contract.

[mudskipper]

Looking for some "gut feel" advice from the collected minds please -

I find myself in a classic Friday/Monday situation.

2 years as a permie, I gave notice and wanted to leave, they pleaded and made a suitably good day rate offer... and for a month I have worked on the basis of a purchase order for a number of "call off consultancy" days at a day rate. Other than that, it's subject only to the Standard Ts and Cs on the PO.

I went for this because it sounded to me like the absolute epitome of the "purchase of a service" rather than "hiring a person", and for a month, I'm reasonably sure HMRC won't be that interested.

Of course, that's another month and another enticing offer has been made, except that now I have the HR drones (who I have managed to avoid for a few weeks) making noises about a contract instead, assuring me that it will be IR35 friendly. They use a few contractors, so familiar with the issues.

so, the question - am I kidding myself that a PO based arrangement is IR35 safe, or would I be better to dig my heels in and insist that I keep working on a PO basis only?

Is self employed rather than Ltd Co an option?

[Gentile]

Looking for some "gut feel" advice from the collected minds please -

I find myself in a classic Friday/Monday situation.

2 years as a permie, I gave notice and wanted to leave, they pleaded and made a suitably good day rate offer... and for a month I have worked on the basis of a purchase order for a number of "call off consultancy" days at a day rate. Other than that, it's subject only to the Standard Ts and Cs on the PO.

I went for this because it sounded to me like the absolute epitome of the "purchase of a service" rather than "hiring a person", and for a month, I'm reasonably sure HMRC won't be that interested.

Of course, that's another month and another enticing offer has been made, except that now I have the HR drones (who I have managed to avoid for a few weeks) making noises about a contract instead, assuring me that it will be IR35 friendly. They use a few contractors, so familiar with the issues.

so, the question - am I kidding myself that a PO based arrangement is IR35 safe, or would I be better to dig my heels in and insist that I keep working on a PO basis only?

Dude. Working for your former actual PAYE employer is the very definition of being inside IR35, whatever your contract says. Unless you were a C# developer for them on the Friday evening, and your Ltd started providing its services as a plumber on the Monday (in which case even then I'm sure Hector would have a go at insisting it represented an ongoing relationship, and cite the fact that you used to flush the toilet when you were a PAYE employee as 'evidence').

Find a new contract is my advice, FWIW. That's the only way you'll be able to get away from the stink of this one. Otherwise every other contract you ever do will be seen in the light of this permie-to-disguised-employee arrangement you've now found yourself in should Hector come calling.

[TheoJones]

Thanks for confirming what I was thinking here (and not sugar coating it...you guys are rough )

I don't suspect bad blood in them offering to make the contract IR35 friendly - as this was offered as "come back to us with any changes your lawyer suggests".

The annoying thing in it all is - I have set up my company to develop a niche software product (I'm not employed as a developer in my current place)... the only reason for giving them days is to build up some cash in the company, and genuinely to help them out with closing out a big project.

I have had discussions with other companies about a few day's work - and the current lot are quite comfortable with having me for the odd days here and there.

I suspect that the most appealing option open to me to shake off the Friday/Monday clusterf*** is to end up with multiple clients at the same time.

[northernladuk]

The fact you think a PO based arrangement is IR35 safe shows complete and utter lack of understanding of IR35 even at the most basic level. Ask them for your job back and stay permie.

[TheoJones]

The fact you think a PO based arrangement is IR35 safe shows complete and utter lack of understanding of IR35 even at the most basic level. Ask them for your job back and stay permie.

You know what mate...

That crosses the line from "telling it like it is" into just personal abuse. out of order.

[TestMangler]

The fact you think a PO based arrangement is IR35 safe shows complete and utter lack of understanding of IR35 even at the most basic level. Ask them for your job back and stay permie.

Sorry NLUK, this is just not true.

I've raised this several times in the past, but to much 'advice' is given out by people who don't actually know anything about the reality of an iR35 enquiry (and I don't just mean you !!)

To the O/P.....a lot depends on what is actually written on your purchase order. Are you named personally ? (a bad thing)

A lot more info about your current way of working before any guidance could be given. Are you working normal days/hours under control of a manager or can you do what you want, when you want ?

When I had my IR35 case a few years ago, I had a call off contract from HDS buying 144 days of MyCo and it was 'not considered' during the investigation. Only 'normal' client/agency/contractor arrangements were investigated.

To the OP, I would advise getting professional advice. IR35 was originally 'aimed at people leaving employment on Friday and returning as a contractor on Monday' but these words only ever appeared in Brown's budget speech, not in the legislation. (AFAIK). A professional advisor will be able to analyse the situaltion and advise without spouting tulip.

Good luck with it, but resist the move to a standard contract at all costs.

[northernladuk]

Sorry NLUK, this is just not true.

<and other stuff>

Agreed. You are quite correct in your points as IR35 is so complex and open to interpretation but the fundamental point is about the difference about being permie and contractor. Changing the way your employer pays you and nothing else is about as basic as IR35 gets. Many situations can be argued but there are not many that are as black and white as this one.