From Outside IR35 to umbrella

[Kanaiya]

Yep agreed. Which is why you really shouldn't ever go from outside to something else at the same client (unless you continue outside). Doing so increases HMRC of asking for back taxes at the same client when you declared yourself as outside.

Completely agree.

[JohntheBike]

Yep agreed. Which is why you really shouldn't ever go from outside to something else at the same client (unless you continue outside). Doing so increases HMRC of asking for back taxes at the same client when you declared yourself as outside.

I would add that if the current contract had been professionally assessed as outside and tax investigation insurance had been taken out and is still in place, then going from outside to something else with the same client might be a necessarily pragmatic approach. We all have to put food on the table!

But as we all know, each person's circumstances are unique and they have to decide the best course of action for themselves.

[CompoundOverload]

Yep agreed. Which is why you really shouldn't ever go from outside to something else at the same client (unless you continue outside). Doing so increases HMRC of asking for back taxes at the same client when you declared yourself as outside.

Hypothetically speaking...

What about if you've only been at a client say 4 months (operating as outside) but want to continue with them because you have the potential for extended work for the foreseeable, BUT they will only accept you past April if you go PAYE or umbrella (and the day rate is good) what do you do then?

Take the risk hoping you won't be investigated, or
If the former does happen, cough up for the 4 months tax you've already done in the outside arrangement and continue as umbrella?

Do you then run the risk that any other engagements you've worked on in prior years with other clients will be looked at?

[Anubis]

Read this

No one knows what HMRC will do. It's your appetite to risk

[nico]

Yep agreed. Which is why you really shouldn't ever go from outside to something else at the same client (unless you continue outside). Doing so increases HMRC of asking for back taxes at the same client when you declared yourself as outside.

On this note, I have been contracting outside IR35 with the same company for the last 6 months and am coming up to a situation where I may have two options :-

1. Take an FTC with them - package probably roughly comparable to my current rate
2. Take an Inside IR35 job with another company at the same rate (Umbrella or still through PSC my choice), but INSIDE. Worse choice financially.

On one hand, the FTC bypasses any IR35 decision but it's Outside to short-term perm at the same Company. On the other, I'd be swapping companies and roles but would deemed Inside.

I can't quite work out if one is more risky Darth HMRC-wise than the other or they are both dreadful?

[eek]

On this note, I have been contracting outside IR35 with the same company for the last 6 months and am coming up to a situation where I may have two options :-

1. Take an FTC with them - package probably roughly comparable to my current rate
2. Take an Inside IR35 job with another company at the same rate (Umbrella or still through PSC my choice), but INSIDE. Worse choice financially.

On one hand, the FTC bypasses any IR35 decision but it's Outside to short-term perm at the same Company. On the other, I'd be swapping companies and roles but would deemed Inside.

I can't quite work out if one is more risky Darth HMRC-wise than the other or they are both dreadful?

Taking an inside IR35 contract elsewhere is a career choice that has nothing to do with tax.

Continuing with the same contract opens up the risk of HMRC asking were your really outside.

The amount of risk involved there is up to you.

[Martin Bank Holiday]

Hypothetically speaking...

What about if you've only been at a client say 4 months (operating as outside) but want to continue with them because you have the potential for extended work for the foreseeable, BUT they will only accept you past April if you go PAYE or umbrella (and the day rate is good) what do you do then?

Take the risk hoping you won't be investigated, or
If the former does happen, cough up for the 4 months tax you've already done in the outside arrangement and continue as umbrella?

Do you then run the risk that any other engagements you've worked on in prior years with other clients will be looked at?

That's the kicker and the thing that I'm currently grappling with.