Trying to understand my IR35 status

[WordIsBond]

Based on the facts you've presented in your opening statements, I'd deem you inside because of the Friday - Monday situation that you're in.
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1. Friday-Monday is not automatically inside.

2. Technically it's not Friday-Monday because the company OP was working for on Friday will not be in existence in Monday and OP will be contracting with a third party. A related party, which doesn't help the case, obviously, but not the same party. And the end client will be a company that has never operated a PAYE scheme here in the UK.

If working practices and contract are clearly outside, I personally would ignore the Friday-Monday thing. If it's borderline, then the Friday-Monday would tip the balance.

[LondonManc]

In fairness, the CEST tool would place a lone mercenary or Batman inside IR35 so I wouldn't give it too much confidence

Maybe not but until it's been dismissed officially as ineffective.

[PerfectStorm]

Based on the facts you've presented in your opening statements, I'd deem you inside because of the Friday - Monday situation that you're in.

Depends if you want to carry out a CEST tool assessment for yourself to confirm or not.

In fairness, the CEST tool would place a lone mercenary or Batman inside IR35 so I wouldn't give it too much confidence

[LondonManc]

Based on the facts you've presented in your opening statements, I'd deem you inside because of the Friday - Monday situation that you're in.

Depends if you want to carry out a CEST tool assessment for yourself to confirm or not.

[WordIsBond]

This is not the same as leaving a company and going back to it as the company will cease trading. There will be no audit where contractors working there will be checked. I would simply ensure your contract and working arrangement are outside IR35.

Technically, this is accurate. Practically, they'll say nothing has changed, if he's ever investigated. Still doing the same work, essentially for the same people.

As you said, there will be no audit. So the likelihood of an investigation starting from the client side is close to nil. The likelihood of it starting from his side is not nil.

If he is investigated they will know who his former employer was. They may not know that it was a subsidiary of his current client. It would help if the name of the sub is different from the name of the parent company. If the names are the same I'd say there's still some risk here.

But, if OP can make sure contract and working arrangements are outside, the fact that the UK sub won't exist anymore does make a much better story and the normal Friday/Monday thing.

OP, see if they will work with you to the extent of using a contract under English law (or Scottish, if applicable). That will help a lot with PI insurance and also makes a good IR35 story. American companies don't sign English law contracts with their employees. They do sign English law contracts with English businesses.

[GhostofTarbera]

Move to a nice country with a low tax rate - job done


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[BlasterBates]

This is not the same as leaving a company and going back to it as the company will cease trading. There will be no audit where contractors working there will be checked. I would simply ensure your contract and working arrangement are outside IR35.

[jamesbrown]

In terms of outside this year the inside the next, the only thing that changes next year is who makes the determination - currently it's you (and your liability) , next April it's the client (and their liability) . The rules about how the determination is formed stay the same.

For an overseas entity with no UK presence, it would still be the OP’s company deciding (and carrying the liability) from next year too.

[PerfectStorm]

IR35 was set up to stop "Friday to Monday" i.e. people leaving and being reemployed as contractors for any reason, so the assumption will be that you're IN as the day to day role won't change on the Monday from the Friday (as it were)

If you could demonstrate that it changed significantly, around Direction and Control, Mutuality of Obligation, Right of Substitution etc (and not just in contract) you might have a case to go outside but you'd be defending it on the back foot

In terms of outside this year the inside the next, the only thing that changes next year is who makes the determination - currently it's you (and your liability) , next April it's the client (and their liability) . The rules about how the determination is formed stay the same.

[jamesbrown]

You'll be inside IR35 unless the facts on the ground change substantially.

You have a few options in terms of the mechanics:

1. Contract inside IR35 (probably doesn't make sense)
2. Register as self-employed and pay tax with your SATR each year
3. Register a PAYE direct scheme (DPNI) with HMRC. This is basically a payroll for a foreign "employer", but you manage the payroll and it doesn't require that you are formally employed by your engager. Also, there is no employer NI.

Tax-wise, your best option is probably (2), but (3) is a perfectly good option too. Be aware that the average HMRC call center person won't know anything about DPNI:

National Insurance for people in the UK working where there is no employer in the UK

[Nunzia]

Dear all, I wonder if you could advise me. I am currently working for an American company which employs me through a subsidiary here in the UK. As I am the sole employee left in the UK, they are deciding to close this subsidiary and making my current role redundant.

They still want to retain my service though so they want me to start contracting for them. They cannot directly emplloy me as they US payroll would not allow an employee with a domicile outside the US.

1. Will I be deemed inside or outside IR35?
2. Can I use with HMRC the argument of - subsidiary is closed, being a contractor is the only way to keep on working for this company, why should I be inside IR35?
3. Is a lmt better than a sole trade?
4. Can I go outside IR35 now and the inside from next year?

Thank you so much for your help.