A question of timing - short term contractor needs when / if to leave

[hammertime1985]

if I were the OP, I'd be calculating what the potential backdated PAYE would be if HMRC came calling for the first 5 months of the contract (1)

And then work out what the 6th month will bring in (assuming it is inside IR35). (2)

If (1) is greater than (2), hand in notice so as to stop working at the end of February, with the last invoice being settled at the end of March. This will reduce the risk of/if HMRC come calling.

But if (2) is greater than (1), and you can't find another contract, it might actually be worthwhile sticking around and setting some funds aside just in case HMRC do come calling. You'd need to keep it there for a number of years though.

I am in a similar conundrum whereby I started a new engagement for a new client for six months (Oct - Apr) with a view to extending further. Got the role via an agent and had the contract / deliverables etc reviewed by a 3rd part tax adviser, who agreed this is outside. Agent and I agreed I would proceed as if the engagement was outside until we know what the client wants to do re the determination post April- still up in the air with regards to this.

I am still unawares and I'm getting nervous. I'll follow up with the agent in the new year. However I have a contingency plan where I will hand notice in (two weeks) on the 19th February so last day is 4th March and final payment (30 days after invoice raised) is paid on the 3rd April, thus paid before 5th April and not caught by the new rules.

Then re-assess the market again post April. Ball ache I know but I'd rather err on the side of caution than take a major risk.

[hammertime1985]

any comments on the above whether this is wise / good approach?

[GhostofTarbera]

any comments on the above whether this is wise / good approach?

IR35 is not new it’s been about since 1999 only change is client makes determination


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[boxingbantz]

You really have chosen the worst time to start contracting.

[redman123]

Testing

[cojak]

would this be more of an issue for OP as he is working for said 'pharma' company or does the above rules apply to every contractor?

Every contractor in that situation.

[dsc]

Also consider the fact that some (most?) clients pick the easy way out and simply won't engage with PSCs past April 2020, so it's not even about inside / outside, it's more of an "all contractors out" approach.

[Dhrucku]

Also consider the fact that some (most?) clients pick the easy way out and simply won't engage with PSCs past April 2020, so it's not even about inside / outside, it's more of an "all contractors out" approach.

It does but the option of wanting flexible workforce will not go away.

It will take the market a bit of time to balance out but these roles (originally done by PSC contractors) will be available by another means (PAYE, Umbrella, FTC). I understand that these will not be so lucrative as operating via LTD company were but they'll eventually be there or thereabouts.

Chase the pay not the way of getting paid.