What to do??

[scoobymap]

Having worked for a company for over 25 years I was made redundant last spring. Having set up my own company as a sole trader plus all the stresses of learning the ropes. Then this week I had a phone from my ex employee asking if I would like to come and chat about initially working for them on a years contract.

i was an employee last time. They don't know about me setting up my own business at this stage. I don't want to drop my new business plans completely (things v slow business wise but should pick up little by little this year) What are my options before I go and have a chat with them next week?? Love to hear your comments. (the work is office based)

[d000hg]

Have you set up a legally registered Ltd company, or have you registered as a sole trader with HMRC? The two are very different.

Either is fine to work directly with a company, most contractors do the former because recruitment agencies prefer not to work with sole traders but if the company has no issue this isn't a big deal. You'd just agree a rate per hour/day and provide invoices. You absolutely need a contract though, to dictate how quickly they must pay and so on.

People are going to warn you that you're inside IR35, which is about the government thinking you're calling yourself a contractor when you're essentially working as an employee. But it rather sounds like you would be working as an employee? [can anyone remember if IR35 applies to sole traders anyway?]

If you plan to be a contractor after this anyway, setting up a Ltd company is worthwhile, but I wouldn't feel the need to for this work.

[northernladuk]

What type of contract? FTC or a proper one. Either way going back to your employer eould generally mean you might be better going Umbrella.

There is another long thread running about somone in exactly your situation. Best bet is to go read that so we don't have to go through it a over again.

[GazCol]

Having worked for a company for over 25 years I was made redundant last spring. Having set up my own company as a sole trader plus all the stresses of learning the ropes. Then this week I had a phone from my ex employee asking if I would like to come and chat about initially working for them on a years contract.

i was an employee last time. They don't know about me setting up my own business at this stage. I don't want to drop my new business plans completely (things v slow business wise but should pick up little by little this year) What are my options before I go and have a chat with them next week?? Love to hear your comments. (the work is office based)

What industry/field do you work in?

[riffpie]

How about taking them on as a client, and doing, say, a couple of days a week for them? They get the benefit of your expertise, you get some income, and you're still free to pursue your business your own way.

[eek]

How about taking them on as a client, and doing, say, a couple of days a week for them? They get the benefit of your expertise, you get some income, and you're still free to pursue your business your own way.

+1. Work out what hours you can do without impacting your new business and offer them those hours and use it to subsidies the business until its making money.

[jamesbrown]

can anyone remember if IR35 applies to sole traders anyway?

No, it's a company liability (hence intermediaries legislation). However, there is a test for (false) self-employment, so a sole trader may be taxed as if they were an employee (i.e. the engager failing to operate PAYE and pay employers NICs; for this reason, among others, the engager would generally avoid this type of arrangement).

[scoobymap]

I have set up as a sole trader NOT Limited.

Can I go back to work with my ex employee after being made redundant, taken into account that HMRC know me as a sole trader (one years contract). What options are there?

Have you set up a legally registered Ltd company, or have you registered as a sole trader with HMRC? The two are very different.

Either is fine to work directly with a company, most contractors do the former because recruitment agencies prefer not to work with sole traders but if the company has no issue this isn't a big deal. You'd just agree a rate per hour/day and provide invoices. You absolutely need a contract though, to dictate how quickly they must pay and so on.

People are going to warn you that you're inside IR35, which is about the government thinking you're calling yourself a contractor when you're essentially working as an employee. But it rather sounds like you would be working as an employee? [can anyone remember if IR35 applies to sole traders anyway?]

If you plan to be a contractor after this anyway, setting up a Ltd company is worthwhile, but I wouldn't feel the need to for this work.

[d000hg]

Can I go back to work with my ex employee after being made redundant, taken into account that HMRC know me as a sole trader (one years contract). What options are there?

If you work as a sole trader, the fact you just left the company won't stop you. Happens all the time that people retire and do a bit of consultancy to their old company.

If you are thinking of going Ltd/Umbrella and are worried how this conflicts with having registered as sole trader already... I doubt it's a big deal but don't know what you would do about it.

[DirtyDog]

If you were made redundant, how come there is work for you to do?

I'd speak to a lawyer before going back - if you received a redundancy payment, and the job isn't redundant then there may be tax implications for you.