Assessed as Inside from April or a Blanket Ban - it's time to leave

[northernladuk]

If it's only for a few months then you won't be able to close your Ltd - that's for when you don't need it for a couple of years.

If you close and then want to contract before then you're going to need to use an umbrella.

Which is a very important point and something I expect we are going to have to help people with in the coming year. Gone perm/brolly and shut ltd without thinking about the longer term implications.

[cojak]

I was planning to do that anyway, but you make a good point on HMRC interest.

Hi-ho, hi-ho, permie I will go...

...for a few months anyways, but shhh don't tell nobody!

If it's only for a few months then you won't be able to close your Ltd - that's for when you don't need it for a couple of years.

If you close and then want to contract before then you're going to need to use an umbrella.

[SouWester]

Close down your Ltd once you’re permie. Then HMRC will take much less interest in you as getting anything from you after closure is marginal and they have much easier fish to catch.

I was planning to do that anyway, but you make a good point on HMRC interest.

Hi-ho, hi-ho, permie I will go...

...for a few months anyways, but shhh don't tell nobody!

[cojak]

Was motivated by IR35 to register after lurking for many years...

I have been offered permie with my current client, or the option to go umbrella (blanket determination... [yawns]).

I have to say I was pretty shocked by the quotes I got from reputable umbrella companies - I didn't realise that I would be paying my own employers NICs (but with a moment's thought this makes perfect sense).

So, if I went umbrella I would recieve LESS take-home than a permie on the same annual gross income, without any of the benefits. This is not "a bit more tax".

Curently on £100k gross (44 weeks x 5 days x day rate). Permie role offers £70k. Delta is 3 weeks leave and £200 per month (in favour of umbrella). Flexibility is a double-edged sword so I have assumed equal.

Clincher for me will be risk of our dear friends at HMRC taking an undue interest in little ole me (or rather, my NI number). I have read all the preceding posts in this thread, but none offer opinions on risk of HMRC investigation on going permie with the client.

From my research the critical ID is my NI number. Based on this, going permie with the client does not increase my risk of HMRC investigation like going 'inside' with the same agency does.

Difficult to qualitfy relative risk of the different options, but I believe that by going permie with my client I would not be attracting any more risk of an HMRC than I am carrying today.

Any comments on this?

B

Close down your Ltd once you’re permie. Then HMRC will take much less interest in you as getting anything from you after closure is marginal and they have much easier fish to catch.

[SouWester]

Going permie less risky then?

Was motivated by IR35 to register after lurking for many years...

I have been offered permie with my current client, or the option to go umbrella (blanket determination... [yawns]).

I have to say I was pretty shocked by the quotes I got from reputable umbrella companies - I didn't realise that I would be paying my own employers NICs (but with a moment's thought this makes perfect sense).

So, if I went umbrella I would recieve LESS take-home than a permie on the same annual gross income, without any of the benefits. This is not "a bit more tax".

Curently on £100k gross (44 weeks x 5 days x day rate). Permie role offers £70k. Delta is 3 weeks leave and £200 per month (in favour of umbrella). Flexibility is a double-edged sword so I have assumed equal.

Clincher for me will be risk of our dear friends at HMRC taking an undue interest in little ole me (or rather, my NI number). I have read all the preceding posts in this thread, but none offer opinions on risk of HMRC investigation on going permie with the client.

From my research the critical ID is my NI number. Based on this, going permie with the client does not increase my risk of HMRC investigation like going 'inside' with the same agency does.

Difficult to qualitfy relative risk of the different options, but I believe that by going permie with my client I would not be attracting any more risk of an HMRC than I am carrying today.

Any comments on this?

B

[Paralytic]

all the contractors i know are moving from outside to inside with the same client and same role
they have no idea they can be target for retrospective tax.

Which clients?

Or do you mean outside to no determination and Umbrella? Still a potential risk, but very different.

[Snooky]

They're walking about with a massive target on their backs.

Agreed.

It'd be so easy for me to stay at the current client as they have a load of work they need me to do and are very happy with me. But I know very well they're taking the easy route and classing everyone inside. So I've told them I'm leaving before April 6. I have nothing to go to as yet but the retrospective risk is just too great.

In conversations with a number of my contractor colleagues I've tried to gently point out this risk but they nod and I can tell they're just planning to switch to umbrella with the same client from April.

On a cynical note, I guess the more people who do that, the more easy money it is for HMRC to chase, which possibly means they're marginally less likely to come after me

[Kanaiya]

I have decided to risk it with an Outside-to-Inside plunge. Aware that the topic has been discussed a gazillion times here but would appreciate some blunt ,this-is-suicidal or not feedback.

Client
Client want me to stay. Agreed a day rate increase (although still a step back from LTD income). Agreed to change the role - including job title, description. Will not be issuing a formal SDS, just asking contracts to go PAYE via brolly. I have made it clear that they will need to consider me 'an employee' (without permanent benefits) in practice. That means no restrictions to WFH, involved in company strategy meetings where relevant, etc. Client has recently been acquired by one of their clients, so the contract will now be with the parent company.

Agency
Claim they have never shared client details with HMRC ever. Recommend their own Umbrella and claim 'no-risk' as the payments will me made via a different entity. Claim HMRC are not going to go retrospective (as assured by them). Yeah, right.

TSM

The risk is all yours as you will have to pay the TAX if HMRC send's the tax bill. You will be an easy catch for HMRC

[dsc]

If they bail on their decision, either way it should be them that foots the bill, isn't that the whole point of it? [...]
I'm sorry but I just can't see how this would ever get back to the contractor if the client succumbs to pressure under an investigation.

It would be the client footing the bill for anything April onwards and it's entirely upto the client / agency (or just client if direct) to sort it out. But if they do cave in and say, "ah sorry, we got it wrong, he / she is indeed inside", it's basically like saying that you are inside now, with you just carrying on regardless. The fact that you carried on past April on a contract which was deemed outside, but your client later on changed their mind due to HMRC pressure and says it's now inside, throws a huge shadow on the work you've done pre April. So most likely, HMRC will then turn to you for any engagement before April and say "well you were working inside from April onwards (even though client said you are outside, but that was incorrect, so is invalid) and your contract / role hasn't changed, which effectively means you were inside all the time, can we have some unpaid tax?

[Kanaiya]

The agency is right, HMRC don’t care who their customers are just the contractors they pay.

and in March you will be on the agency report to HMRC with your NI number, your limited company details and a large sum on which little NI is paid
and I April you will be on the (same) agency report with the same NI number, a different company and a large NI payment.

To HMRC the end client doesn’t matter it’s the agency that ties everything together

True. Thats what is going to happen . HMRC is going to catch the easy fish.