Reply to: Contractor with 2 IR35 Contracts

[philgo]

Hi All

Worked Outside IR35 Last year however difficult landing one this year and picked up 2 Inside IR35 (Tax is a B***H) as you can imagine

Any ideas on how I can save paying the 40-45% Tax Brackets

I am new to the IR35 Contracting obviously there are drawbacks in comparison to Outside IR35 just looking for some General advice

Apologies if posted in the wrong section of this forum

Appreciate your advice

I guess one thing you can do if you don't need all the money and want to reduce the overall tax, is to pay into a SIPP and get basic and high band tax relief. You can also get back your £12500 yearly allowance if you are above 100k using the SIPP contribution. Issue is obviously that money is blocked until retirement ....
I guess another way might be to invest money into startups through specific vehicles but I have not looked into it.

[lukemg]

Dont forget countback 3 years for the pension so thats 120k to work with if you haven't used any up in previous and current years and that is a nice starting pot. Stick it in a global index VWRL works well for me and is low cost/hugely diversified or consider Vanguard lifestrategy for auto rebalancing and risk levels at whatever you can live with.
A mate was running 1 inside, 1 outside which is obviously better than 2 in, 2 laptops, phones. Not recommending but he said it was workable and also he worked a lot harder on both contracts than he did on one and they both practically begged him to renew (he chucked the inside one back in after a few months).
Course he's going to hell but can afford a slightly better party on the way...

[northernladuk]

I have seen more than one vindictive employer try and throw a sue-ball. I've never known it work to get any £££££. But I have seen one person suffer a nervous breakdown due to the stress.

Like I say. It's a vindictive action that I wouldn't put past a disgruntled employer who feels that they've been skanked. And if the employer has a pet lawyer, who'll set a junior writing an aggressive letter for £500 it's not exactly costly for them.

I've seen a smallish consultancy supplying a large client sue one of it's employees who handed in notice one evening then just didn't turn up again so welching on a three month notice period. Word is he ended up having to pay an undisclosed amount back to the consultancy so never went to court.

[Lance]

Nope and I can't see it happening.

Mind you I probably read more employment tribunal judgments than others on here so my views will differ from the imagination of others...

What will happen is the OP is binned - someone will be annoyed but HR will say it's not worth the risk pay up...

And if not the umbrella will have to as equally the law is fairly clear there now..

I have seen more than one vindictive employer try and throw a sue-ball. I've never known it work to get any £££££. But I have seen one person suffer a nervous breakdown due to the stress.

Like I say. It's a vindictive action that I wouldn't put past a disgruntled employer who feels that they've been skanked. And if the employer has a pet lawyer, who'll set a junior writing an aggressive letter for £500 it's not exactly costly for them.

[northernladuk]

Has anyone got an example of a single case of having to reimburse a client? The suggestion is like a headline from The Sun, no actual tangible evidence it occurs for IT contractors.

The "overemployed" scene is big in US/SV - and even there it's is unheard of to have any repercussion other than being let go.

Not that we have seen on here, so it's a minor risk but not beyond the realms of possibility so worth of a mention to make an OP aware of the potential risk.

As already mentioned we have seen plenty of cases where the contractor does not get any money owed to them. Maybe different for brollies but if they are on a long billing cycle in arrears that could be substantial.

There is of course the reputational risk as well. It's not unheard of for contractors to bump in to each other or perms from the original client being at the new one. Obviously the client that binned you is off the radar as well. Again, not a massive risk but again not unheard of so worth making people aware of it.

[eek]

Has anyone got an example of a single case of having to reimburse a client? The suggestion is like a headline from The Sun, no actual tangible evidence it occurs for IT contractors.

The "overemployed" scene is big in US/SV - and even there it's is unheard of to have any repercussion other than being let go.

Nope and I can't see it happening.

Mind you I probably read more employment tribunal judgments than others on here so my views will differ from the imagination of others...

What will happen is the OP is binned - someone will be annoyed but HR will say it's not worth the risk pay up...

And if not the umbrella will have to as equally the law is fairly clear there now..

[TheGreenBastard]

Has anyone got an example of a single case of having to reimburse a client? The suggestion is like a headline from The Sun, no actual tangible evidence it occurs for IT contractors.

The "overemployed" scene is big in US/SV - and even there it's is unheard of to have any repercussion other than being let go.

[northernladuk]

I'm not so sure - I suspect you would be paid up to the second they told you were to go and not a second more..

I'd imagine this in most cases but agents/clients withholding the last pay due to the client not getting their value is well documented on here so a distinct risk to be aware of. I'd not be sitting pretty expecting my last pay without a problem in the OP's situation.

[eek]

I think you are probably right although throw in trying to get your last invoice settled would be a challenge.

I'm not so sure - I suspect you would be paid up to the second they told you were to go and not a second more..

[SussexSeagull]

I agree.
Very unlikely to end up in anything other than gross misconduct and being fired.

Although... If one of the clients was small, or the umbrella/agency were vindictive, they might try to make it a criminal fraud case. No idea if that can be used against an employee, but if I was the client/agent/umbrella and in a bad mood I'd give it a crack.

Unlikely they'd get the money back, but the OP would have significant stress dealing with the fallout and paperwork.

I think you are probably right although throw in trying to get your last invoice settled would be a challenge.

[Lance]

I am generally not in the 'they will sue you' camp but if one contract was expecting you to work 9-5 and they discover you have been working another contract at the same time then it isn't beyond the realms of possibility that they will want some money back.

I agree.
Very unlikely to end up in anything other than gross misconduct and being fired.

Although... If one of the clients was small, or the umbrella/agency were vindictive, they might try to make it a criminal fraud case. No idea if that can be used against an employee, but if I was the client/agent/umbrella and in a bad mood I'd give it a crack.

Unlikely they'd get the money back, but the OP would have significant stress dealing with the fallout and paperwork.

[SueEllen]

I have two laptops in use and have daily stand ups then the rest of the day it is requirements gathering and documentation and any database changes as necessary

So you admit you have to interact with people?

You are going to get confused and someone is going to message you/contact you when you aren't available/middle of task for another client.

At one client I had 3 laptops to do the work. Pain in the behind as different things had to be done on different laptops but I had to answer messages quickly.

[SussexSeagull]

I am generally not in the 'they will sue you' camp but if one contract was expecting you to work 9-5 and they discover you have been working another contract at the same time then it isn't beyond the realms of possibility that they will want some money back.

[dsc]

I have two laptops in use and have daily stand ups then the rest of the day it is requirements gathering and documentation and any database changes as necessary

What happens when you get some sort of team meeting or implementation discussion / tech talk request from both companies at the same time?

It's like cojak already said, it's basically doing two perm jobs, but at the same time, not a lot (none most likely) of companies would be happy with you doing this as it will most likely affect your efficiency / availability etc. Good luck when someone eventually finds out...

[TheGreenBastard]

I have two laptops in use and have daily stand ups then the rest of the day it is requirements gathering and documentation and any database changes as necessary

Good lad, sounds like you're delivering to client expectations. Great time to be doing it with inflation what it is, UK Plc thanks you for your tax donations.