Returning to the same PS client as 'Inside IR35' after being 'Outside IR35' before

[contractbunny8]

Hi,

Had a quick look but couldn't find anything on this so making a new post.

I'm in a situation where I'm considering going back to the same PS client, where earlier in the year I was working as 'outside IR35' but now the position will be 'Inside IR35'. I left on mutual terms and haven't been on any 'Inside IR35' contracts at this PS client.

Questions on going back as 'Inside IR35':

1) Can the HMRC back date the 'Inside IR35' to my contract earlier which was 'Outside IR35'? - I was there as outside close to 2 years, and on going back will be working under the same manager, but on a completely different role.

2) What % should I ask for as a rough increase as my take home pay check will be affect by the 'Inside IR35' tax/NI/other bits?

If I do go back, I would have had around 9-10 weeks off from that PS, not sure if that makes any difference.

Hopefully these questions are the easy ones!

Cheers,

[northernladuk]

Hi,

Had a quick look but couldn't find anything on this so making a new post.

I'm surprised. These are pretty core questions and even not following it that much I've seen this discussed plenty.

I'm in a situation where I'm considering going back to the same PS client, where earlier in the year I was working as 'outside IR35' but now the position will be 'Inside IR35'. I left on mutual terms and haven't been on any 'Inside IR35' contracts at this PS client.

Questions on going back as 'Inside IR35':

1) Can the HMRC back date the 'Inside IR35' to my contract earlier which was 'Outside IR35'? - I was there as outside close to 2 years, and on going back will be working under the same manager, but on a completely different role.

If it is truly a completely different role then you are comparing apples with pears. Your outside result was for one contract, your inside for a completely different. IR35 is on a contract by contract basis. If they are completely different they can't compare the two. They have to be taken on their own merits.

2) What % should I ask for as a rough increase as my take home pay check will be affect by the 'Inside IR35' tax/NI/other bits?

25-30% I believe are the numbers quoted on multiple threads but if this is a new contract then stick in the rate you want for the new work, not compare it to the old contract which you say is different.

If I do go back, I would have had around 9-10 weeks off from that PS, not sure if that makes any difference.

I very much doubt it makes any difference at all.

Look for some threads by Psychocandy. They document the transition from an outside gig to an inside one in excruciating detail.

[SeanT]

...in excruciating detail.

[TheFaQQer]

1) Can the HMRC back date the 'Inside IR35' to my contract earlier which was 'Outside IR35'? - I was there as outside close to 2 years, and on going back will be working under the same manager, but on a completely different role.

Yes and no.

HMRC cannot "back date" a contract to make it inside IR35, but they could open up an investigation into that contract and look at whether you were genuinely outside or not. If they do look into your past work then you want to make sure that you have professional representation before the brown envelope hits the mat, and don't attempt to answer any questions from HMRC on your own.

You have two separate contracts, so the new one cannot be back dated, but the old one could be investigated.

2) What % should I ask for as a rough increase as my take home pay check will be affect by the 'Inside IR35' tax/NI/other bits?

There's no definite answer to this, because if you are inside IR35 you are now not only liable for two lots of National Insurance (plus the Apprentice Levy, probably) but you cannot claim any travel and subsistence expenses any more. My advice would be to work out what you want your take home to be in a typical month. Add on your travel and subsistence expenses and any other expenses that you cannot claim any more, since these have to come out of your post tax income. Then look at some PAYE calculators to determine what the new rate needs to be to get you that take home - you (and your client) might find that eye wateringly high. I went through some numbers with someone recently and because of expenses, they needed a 65-70% increase in rate to take home the same amount as they were on before. I also know of some people who are taking home more because the client has given everyone staying a blanket 30% increase and they have lower expenses than other people.

You may have other questions as well as they arise - have a look at the FAQ sticky at the top of the forum as well, as there may be other questions that you don't know you should ask

Good luck in the new role.

[contractbunny8]

cheers everyone, most helpful!

So if the company I used was to be 'closed', I'm guessing HMRC can review whilst its open/being closed, but once its closed its closed, is this the right way of thinking about this?

i.e if I'm 'Inside IR35' I don't need the company, so I'm closing it.

[northernladuk]

cheers everyone, most helpful!

So if the company I used was to be 'closed', I'm guessing HMRC can review whilst its open/being closed, but once its closed its closed, is this the right way of thinking about this?

i.e if I'm 'Inside IR35' I don't need the company, so I'm closing it.

Closing the company opens a whole new can of worms as, depending on your situation, you may have problems starting a new one 'in the same trade' due to new rules.

As TF says, read the stickies. If it's not covered in there I am sure there have been a couple of threads about what to do with the old one. Again, somewhere in PC's posts is what he did with his company.

[northernladyuk]

Closing the company opens a whole new can of worms as, depending on your situation, you may have problems starting a new one 'in the same trade' due to new rules.

As TF says, read the stickies. If it's not covered in there I am sure there have been a couple of threads about what to do with the old one. Again, somewhere in PC's posts is what he did with his company.

I missed that. Was it a good one?

[northernladuk]

I missed that. Was it a good one?

My current infraction status mean I am unable to answer that.

[MrMarkyMark]

My current infraction status mean I am unable to answer that.

[northernladyuk]

My current infraction status mean I am unable to answer that.

Linky?