IR35 - Am I pushing my luck? How do I be careful?

[PerfectStorm]

Leaving you open to having your salary deemed as dividends and losing at least another 7.5%...

Plus the corporation tax!

[tractor]

....

Doesn't that mean that if you go perm, HMRC would see you as a disguised contractor?

Leaving you open to having your salary deemed as dividends and losing at least another 7.5%...

[expat]

Doesn't that mean that if you go perm, HMRC would see you as a disguised contractor?

[vwdan]

Off topic but it might affect your expenses as it ceases to be a temp location buflt I think The FaQQer said this doesn't apply now not something.

Any contracts will be on-site with an end-customer, so that's by the by the really. Thanks both for your views though - means I can just carry on acting liking a contractor until I get offered something to the contrary!

[northernladuk]

Off topic but it might affect your expenses as it ceases to be a temp location buflt I think The FaQQer said this doesn't apply now not something.

[northernladuk]

Unless the role you are doing is deemed enduring and you are moving from contract to perm doing the same thing then IR35 isn't an issue here. It's on a contract by contract basis and the perm role has virtually nothing to do with the contract. IR35 is a non event here IMO.

[tractor]

.....

This might sound marginally over complicated, but it's really not - I'm just after a little bit of feedback and some thoughts on how I can mitigate.

Last year I wound up in a contract with a white-box consultancy service - they were a good bunch. I did one big project with them along with a couple of little side ones (All my main technology, all very IR35 friendly including some time sat at home with nowhere to go and even some time away at other customers). When my contract ended (no more work) we came up with ad-hoc agreement and I've done a couple of days here and there based on that.

Last week they got in touch to see what I was up to and it came out in casual conversation that I'd got a permie interview* elsewhere - I was asked to pop in for a coffee a chat where they made it clear that they'd be interested in at least discussing the option of me being going permie. The big thing to note here, IMHO, is that the permie role would be much more senior and differently focussed than the contract role.

So that bit I'm all okay with - it's been >7 months since I last did any work for them and the discussion is totally different to what I was up to last year.

However, separate to the above, one of the account managers has now asked if I'm about to do some of this ad-hoc work. I've agreed to a few weeks in August and I've now got another availability request from another account manager.

So, as it stands - as an individual, I'm having some high level talks with the senior management about maybe (and it is a maybe, from both sides - these are toe dipping convos, but it does feel like it may go somewhere) and as a company, I'm discussing some potential business opportunities over the next couple of weeks, based off our previous agreements.

From a business perspective, this all makes perfect sense to me. No permie-work decision will be made for a few weeks, and 4 - 12 week notice periods would be standard for a role like this. In the meantime. as a company I need to ensure that there is work going forwards.

I'm just a bit worried about the possibility of doing contract work with them for however long and then winding up in a permie role. Are HMRC going to see this as a red flag and have a problem with it? What can I do to mitigate this?

IR35 was ostensibly introduced to stop F2M Perm 2 Contract, not the other way around. We all know why it was really introduced but that is a different story.

Given that there is no intention on your part to solicit a perm role at the outset of any pending intermediate contract, I cannot see how HMRC would determine IR35 applies in retrospect. It may be more complicated than that if after taking a perm role with them, you leave the company open and contract p/t for other clients but to gauge that risk you really would need some professional input from the legals. If you are an IPSE member, the help line would be a good place to start.

I would say (IANAL) that if you take a perm role and close the co immediately, there would be little risk AFAICS.

[vwdan]

This might sound marginally over complicated, but it's really not - I'm just after a little bit of feedback and some thoughts on how I can mitigate.

Last year I wound up in a contract with a white-box consultancy service - they were a good bunch. I did one big project with them along with a couple of little side ones (All my main technology, all very IR35 friendly including some time sat at home with nowhere to go and even some time away at other customers). When my contract ended (no more work) we came up with ad-hoc agreement and I've done a couple of days here and there based on that.

Last week they got in touch to see what I was up to and it came out in casual conversation that I'd got a permie interview* elsewhere - I was asked to pop in for a coffee a chat where they made it clear that they'd be interested in at least discussing the option of me being going permie. The big thing to note here, IMHO, is that the permie role would be much more senior and differently focussed than the contract role.

So that bit I'm all okay with - it's been >7 months since I last did any work for them and the discussion is totally different to what I was up to last year.

However, separate to the above, one of the account managers has now asked if I'm about to do some of this ad-hoc work. I've agreed to a few weeks in August and I've now got another availability request from another account manager.

So, as it stands - as an individual, I'm having some high level talks with the senior management about maybe (and it is a maybe, from both sides - these are toe dipping convos, but it does feel like it may go somewhere) and as a company, I'm discussing some potential business opportunities over the next couple of weeks, based off our previous agreements.

From a business perspective, this all makes perfect sense to me. No permie-work decision will be made for a few weeks, and 4 - 12 week notice periods would be standard for a role like this. In the meantime. as a company I need to ensure that there is work going forwards.

I'm just a bit worried about the possibility of doing contract work with them for however long and then winding up in a permie role. Are HMRC going to see this as a red flag and have a problem with it? What can I do to mitigate this?