Old consultant considering going back to contracting after 3 year 'Perm' break...

[ReallyTallTony]

Hello,


I am currently permanently employed (for 3+years) with a company. I contracted for many years prior to this (Pre IR35). An old client has asked me to help, on a contract/consultant basis to help 'break up' the organisation, selling parts etc. Expected to be a 2 year contract.

I am wary of IR35 and potential pitfalls. But being outside of IR35 is known to be tax-efficient.

The new role is to:

• Maintain operational aspects (governance of suppliers etc)
• Advise/resolve on contract and supplier challenges during the divesting of the company

I would be contracting directly.

Questions:

• As there are operational elements, does this fall into IR35 status automatically?
• Because I am contracting directly (no intermediary) what should I be aware of?
• Ltd Company Vs Sole trader - which is best?
• What should I be considering
• How can IR35 review companies help? Writing the contract for example?

Appreciate your thoughts and educated opinions please.

[northernladuk]

Hello,


I am currently permanently employed (for 3+years) with a company. I contracted for many years prior to this (Pre IR35). An old client has asked me to help, on a contract/consultant basis to help 'break up' the organisation, selling parts etc. Expected to be a 2 year contract.

Sounds like a role you'd get a consultant in because you don't have in house knowledge of this thing for sure. You wouldn't permanently employ someone to do this because you'd have to give them something to do after so the role sounds outside. It's the details of the engagement.

I am wary of IR35 and potential pitfalls. But being outside of IR35 is known to be tax-efficient.

The new role is to:

• Maintain operational aspects (governance of suppliers etc)
• Advise/resolve on contract and supplier challenges during the divesting of the company

I would be contracting directly.

So you'd need a Statement of Work detailing exactly what you'll be delivering. It sounds like there there is a clear vision of what is to be achieved and high level view on he steps to get there so shouldn't be hard to do.

Imagine if the client went out to an external provider, there would be a very clear list of things to do for the supplier to quote for and deliver to get paid. You need something similar.

You need to avoid a job description and anything woolly that would indicate you just sit at a desk and do what the client says until it's over.

As there are operational elements, does this fall into IR35 status automatically?

No operational elements do not fall in automatically. Following client processes and procedures has to be done by all not just perms so should be fine. Devil is in the details though. It's what you deliver at the end that's most important on a SoW contract.

Because I am contracting directly (no intermediary) what should I be aware of?

New legislation now means the client is responsible for the determination. If they aren't aware then they need to be. They need to use CEST and other advice to create the role that is outside IR35 and be happy they shoulder the blame if it is found to be inside later. QDOS and other type companys do offer services to consult with clients to help them wade through this. If they've got other contractors on site they may already be aware. It's a seismic shift for us recently so pretty important.
Also direct you don't have factoring so you maybe at the mercy of their B2B payment terms which could be up to 90 days.
If your job is to break the company up are you sure you are going to get paid towards the end I guess?

Ltd Company Vs Sole trader - which is best?

You've already said you know outside being most tax efficient. IR35 doesn't apply to sole traders as they are fully taxed so LTD.

What should I be considering

Not sure what you mean by this.

How can IR35 review companies help? Writing the contract for example?

They can advice the client on IR35 obligations, they can give you template contracts (free on QDOS site) and then review them for business and IR35 clauses. I don't think QDOS is the best for business review. I have a feeling they will do an IR35 only. Plenty of recommendations on here for business review if you do a search.

Appreciate your thoughts and educated opinions please.

Oops. Maybe it shouldn't have been me that posted then

[ladymuck]

Hey NLUK, sort your quotes out that post is a right mess!

[ladymuck]

Contract-wise, I'd start with a template from Qdos or IPSE as that'll be off to a good start.

Then make the schedule to the contract, or SOW if you prefer, be as water tight as possible as to the exact deliverables. No 'ad hoc as required' nonsense.

Also consider making it fixed price (plus expenses!) and then billing in stages rather than on a day rate basis. So look at the gig as a package with checkpoints / stages / milestones that you need to hit and get agreement on before you can invoice.

Changes in scope should require a change to the schedule/SOW, or an addendum, with the charge for the extra work added onto what you've already quoted.

[northernladuk]

Hey NLUK, sort your quotes out that post is a right mess!

Hey I'm a service bod not a coder. Fixed