Reply to: Moving from Permie to Contractor

[Fred Bloggs]

OK. I don't now much about IR35. Is there any resource clearly defining what makes inside/outside IR35? I have just found discussions and articles about it.

So, is it a rule that starting contracting for the same employer automatically puts under IR35? Even if I set up Ltd, make myself self-employed and contract would be project based and time limited?

For the purposes of this discussion it is safe to say "yes" to that question.

[Wanderer]

OK. I don't now much about IR35. Is there any resource clearly defining what makes inside/outside IR35? I have just found discussions and articles about it.

So, is it a rule that starting contracting for the same employer automatically puts under IR35? Even if I set up Ltd, make myself self-employed and contract would be project based and time limited?

No, there is no black and white test for IR35 - that's why people hate it so much. I can tell you that if you have gone from permie on Friday to contractor on Monday with the same employer then this is a red rag to a bull as far as IR35 is concerned.

It's not an insurmountable problem but you will need to get yourself some professional advice from the likes of the PCG or one of the companies which offer IR35 contract reviews to make sure your contract is bullet proof and armour plated. You must be taken on to do a specific project and stick to that (as opposed to working on whatever the client tells you to do IR35:Control), you have the right to subcontract all or part of the work (right of substitution IR35:ROS) and there is no requirement for the client to offer work or for you to work for them (IR35:MOO). Get all these right and you have a strong case for being outside.

Remember that it's also your actual working practices which put you in or out of IR35 too. It's no use having all the good words in the contract if your employer treats you like you are still a permie...

[desnik]

There's no problem as long as you declare yourself inside IR35 and pay the NI and income tax. That's the only issue, it's what IR35 is for.

OK. I don't now much about IR35. Is there any resource clearly defining what makes inside/outside IR35? I have just found discussions and articles about it.

So, is it a rule that starting contracting for the same employer automatically puts under IR35? Even if I set up Ltd, make myself self-employed and contract would be project based and time limited?

[Fred Bloggs]

Thanks for your replies!

Does anyone has experience with moving from permie to contractor within the same company? Has anyone made the jump to contracting this way?

There's no problem as long as you declare yourself inside IR35 and pay the NI and income tax. That's the only issue, it's what IR35 is for.

[Wanderer]

Does anyone has experience with moving from permie to contractor within the same company? Has anyone made the jump to contracting this way?

I know lots of people have done it but you're a prime target for IR35 if you do. You are probably better to make a clean break and work somewhere else.

That said, a job is a job.

[desnik]

Thanks for your replies!

Does anyone has experience with moving from permie to contractor within the same company? Has anyone made the jump to contracting this way?

[SueEllen]

Although my current role is 2/3rd line support, I am currently based on a customer site doing a server consolidation to vm project where I have been doing the design. we are only classed as 2nd/3rd line when it comes to the pay reviews.

Then on your CV make your job title more generic then support to cover all the work you have done for your employer.

My idea for contracting is to get the cash together so that I can afford more training and enhance my skill set. Looking at the market there seems to be a lot of support type roles at the moment.

You will have to do that anyway while you are contracting as you are responsible for your own training.

What do others do in my situation ie. a support role when they go contracting ? do they do support short term and then move into design/pm etc.

I never started out in support, however I have worked with permies who have or were the process of moving to a different role in the company. If possible see if you can do an internal move while employed, and get your permie employer to train you on the job.

[Wanderer]

Don't tell the agent about the notice period - or do, but say that you'll get round that.

Yeah, hands up who's had an agents want you to be able to start tomorrow but then it takes them two weeks for the agent/client to sort the paperwork out.

Tricky one though because you could easily get a gig where they really do want you to start tomorrow.

[malvolio]

The thing to remember is that as a contractor, nobody's interested in potential and only agencies are interested in paper qualifications. You are hired on the record of what you've achieved, nothing else. Focus on what you can demonstrate you know how to do to see what the market is like and how profitable it may be.

[eg73]

skills

Although my current role is 2/3rd line support, I am currently based on a customer site doing a server consolidation to vm project where I have been doing the design. we are only classed as 2nd/3rd line when it comes to the pay reviews.

My idea for contracting is to get the cash together so that I can afford more training and enhance my skill set. Looking at the market there seems to be a lot of support type roles at the moment.

What do others do in my situation ie. a support role when they go contracting ? do they do support short term and then move into design/pm etc.

[SueEllen]

Well for me my employer has broken my contract since they have
1. not kept the terms as outlined under TUPE
2. will not provide a stakeholder pension even though due to the size of the company they have to

so it should be quite easy to get out of the notice period early if need be

That's irrelevant if you haven't put in a complaint (grievance) before you argue about the notice. The complaint needs to go in around the time you notice the problem i.e. you should have noticed the TUPE but probably not the stakeholder for a while.

However it also depends on whether the employer has a clue ( i.e. lawyers) about what they are doing.

now just got to find a 2/3 line support role

To a search on this board as if your only skills for contracting are support you will probably end up with problems in the long term.

[eg73]

my situation

Well for me my employer has broken my contract since they have
1. not kept the terms as outlined under TUPE
2. will not provide a stakeholder pension even though due to the size of the company they have to

so it should be quite easy to get out of the notice period early if need be

now just got to find a 2/3 line support role

[SueEllen]

From various people I know who have left jobs in different industries with varying notice periods of up to 3 months, you can always negotiate them with your employer.

As the employer knows if they aren't flexible you will either:
1. Take sick leave which they have to pay for - loads of companies still give full pay for 3-6 months of sick leave
2. Simply not turn up - I have had friends' walk out of jobs in the past.
3. Turn up and do absolutely nothing

Unless you are in particular industries (and most areas of IT aren't one of them especially if you are a contractor) then you don't need a detailed reference or will even receive one.

The only issue is if you work a niche industry then they can try and blacken your reputation.

[northernladuk]

Seems no one has mentioned it (or more accurately I haven't read the thread in enough detail to know if they have) make sure you read the links and first timer guides that are available to the right first and use the forum search as it is highly likely every question you have has been asked numerous times.

[TheFaQQer]

Hi,
Just starting to make the move from Permie to Contractor but find it difficult as the agents are not really interested when I say I have a five week notice period.
I think I can get out of this period due to my current employer being in breach of contract but this would be a final choice and only used if really necessary.

My question is how did you make the move from Permie to Contractor ? Did you end up leaving your Permie role before finding a contract

Don't tell the agent about the notice period - or do, but say that you'll get round that.

In this climate, you'd be stupid to leave your permie job to take nothing - between my starting to look for a contract and leaving permiedom, it took 5 months to get that first role. And that had nothing to do with notice period - my contract with my employer was badly written and said that I could waive the right to give notice if I wanted. In the end, once I had the contract in the bag, I gave two weeks notice, with the guarantee that I would finish all the work that I was working on and train someone else before I left.

At the end of the day, a notice period that ties you in for that length of time could well be argued as an unreasonable restraint of trade. Plus, if you have an employee that you know wants to leave, you might find they are happy to let you go sooner rather than later.