Contracting for Previous Employer?

[jamesbrown]

In my opinion, you would be IR35 caught but by all means do the Business Entity Test and tell us what your score is.

Perhaps you're making a point about targeting rather than the reality of the situation but, in terms of the latter, the BET is not a good reflection of IR35 case law. By construction, the OP will (almost certainly) get a low score for the BET. It's also important not to confuse the reality of the legislation with the media releases that have accompanied it (such as examples about F2M). However, NLUK also has a point, and unless there's something extremely appealing about the contract, it may be worth looking elsewhere. To the OP: bottom line, if this contract is important to you, don't rely on the info. in this thread (including mine ) and get an expert opinion.

[northernladuk]

One thing to point out here as well. Most of us agree you may not automatically lose if it went to tribunal but that is the only good outcome of a terrible situation. The tribunal will not be a pleasant experience and sit over you for a very long time. In this case it would be better to avoid the situation altogether rather than bank on winning when it happens. It just isn't worth it.

Jack that gig in and go do it properly.

[LisaContractorUmbrella]

Thanks for all the advice. The contract role will be different to the role when I was a permie, however a gap of only a three months before leaving concerns me. Although I've had two separate contracts within the three months.

I will be contracting for an IT Services Provider, they have a requirement to put multiple resources on-site. They are not a recruitment agency. I have done work for this company previously through my Limited Company (project work etc) alongside my other contracts.

Would it be of benefit if my contract was directly with the IT Service Provider, providing services for their clients, e.g. "provide dba support on behalf of X's clients on-site and remote" then don't mention any end clients in any Assignment Schedules etc? I'm on very good terms with the IT Provider and getting them to agree to this wouldn't be an issue.

As others have said, to a degree it really doesn't matter what is said in the contract - in the event of an IR35 investigation it would be your working practises that would be primarily considered

[Wanderer]

If I took the contract, do you think I could be considered to be within IR35?

In my opinion, you would be IR35 caught but by all means do the Business Entity Test and tell us what your score is.

Pay particular attention to the question:

Has the current end client engaged you:

• on PAYE employment terms
• within the 12 months which ended on the last 31 March
• with no major changes to your working arrangements?

If you answer "Yes" to this question then you are almost certainly caught unless you are employing subcontractors to do the work for you.

Any contract with the agent I'd run past an accountant to make sure it was IR35 friendly.

Remember that the contract terms don't mean anything if the investigator looks at your working practices and finds that the reality doesn't reflect the contract.

Not the answer that you were looking for, sorry.

If you ask around enough, you might get the answer you want but I don't think that changes the reality of the situation. Working for a previous PAYE employer is a big negative pointer when it comes to IR35 because this is specifically what the legislation was introduced to combat...

[Axe1974]

Thanks for all the advice. The contract role will be different to the role when I was a permie, however a gap of only a three months before leaving concerns me. Although I've had two separate contracts within the three months.

I will be contracting for an IT Services Provider, they have a requirement to put multiple resources on-site. They are not a recruitment agency. I have done work for this company previously through my Limited Company (project work etc) alongside my other contracts.

Would it be of benefit if my contract was directly with the IT Service Provider, providing services for their clients, e.g. "provide dba support on behalf of X's clients on-site and remote" then don't mention any end clients in any Assignment Schedules etc? I'm on very good terms with the IT Provider and getting them to agree to this wouldn't be an issue.

[jamesbrown]

Agreed with all the above comments. This needs to be approached with the usual contract review followed by a careful and truthful analysis of your intentions and how the working practices will differ in the contracting scenario. The working practices should be part of the review process in this instance, and you should clearly document how the working practices have changed (e.g. tabulate the before and after). I agree that a Confirmation of Arrangements would be useful supporting information and various other secondary factors will also build a picture of your intentions. For example, in my opinion, while the determination is made on a contract-by-contract basis, it would also help to show that you are in business on your own account, so parallel contracts doing similar things would also help. Overall, in keeping with the above comments, this needs to be approached as usual, but perhaps with an additional degree of rigor, documentation and truthful reflection.

[Qdos Contractor]

As people have already said, it really depends on how you are treated in reality. If they still see you as an employee filling the same role you were before, it'll be difficult.

How long was the gap between employment and self employment?

This type of situation is where the Confirmation of Arrangements document would be helpful. If you're returning to a previous employer HMRC are always going to pick up on that, but if you have documentary evidence that you are working as an independent contractor it will make a big difference.

[BlasterBates]

My experience is of contractor to permie is that the role of the contractor changes beyond recognition and vice versa. I´ve seen one or two contractors do this. I´ve also seen one or two permies come back from retirement as contractors, and again they do not just simply slip back into their previous role. I presume this would be the same in your case and therefore I would treat this just like any contract.

I think at least in the past before IR35, some employers have simply colluded with their employees simply to save NI, but I think that probably no longer occurs.

I would just be more aware that you don´t slip over that ill defined border, where you are being told to do things on a daily basis and that you are working independently on a specific project.

[LisaContractorUmbrella]

Going back as a contractor to somewhere you worked before will not necessarily put you inside IR35 unless you are going back to do exactly the same job but just via an intermediary. You should be considering the levels of supervision, direction and control that the client will have over your working practises, whether or not you could send in a sub if you wanted to, whether you will be providing your own equipment etc etc. IR35 is about far more than getting the contract right - your working practises are the most important thing

[Contreras]

I've been contracting for about three months. I've been offered a contract with with my previous employer (I was permanent with them for six months). The contract is with an agency, not direct.

If I took the contract, do you think I could be considered to be within IR35?

Any contract with the agent I'd run past an accountant to make sure it was IR35 friendly.

Thanks for any advice.

High risk of investigation, yes. Automatically inside IR35, no IMHO, but you'd have an uphill struggle proving it. If you were obviously acting in business on your own account - e.g. bringing in your own workers, or fixed price deliverables - then fine, but if you're going in via an agent to do a similar role as before then no chance.

Don't just "run it past the accountant". Use a professional review service and in particular get them also to review your intended working practices.

If you don't want to pay for a review knowing that it's likely to fail then download* a template Confirmation of Arrangements letter and see how far you can get the end client to sign up to this.

* Bauer & Cottrell - Status/IR35 Information sheets
* IR35 - Qdos Consulting
* Contract templates | PCG

[Sockpuppet]

I've been contracting for about three months. I've been offered a contract with with my previous employer (I was permanent with them for six months). The contract is with an agency, not direct.

If I took the contract, do you think I could be considered to be within IR35?

Any contract with the agent I'd run past an accountant to make sure it was IR35 friendly.

Thanks for any advice.

If its the same role certainly. The number of middle companies has no bearing. If its a different role in a different location when would be OK to argue. I used to work for DHL. Doesn't mean the whole of DHL Group is out of bounds for me as a contractor.

Also accountants are NOT IR35 specialists. B&C, QDOS are.

[Axe1974]

I've been contracting for about three months. I've been offered a contract with with my previous employer (I was permanent with them for six months). The contract is with an agency, not direct.

If I took the contract, do you think I could be considered to be within IR35?

Any contract with the agent I'd run past an accountant to make sure it was IR35 friendly.

Thanks for any advice.