What would you do ?

[ladymuck]

How would this differ from this example.

A property development company hires a self-employed plasterer to do some work for them. He works for them for 3 to 6 months. After that time the property development company decide they like the contractors work and decide to take him on full time as an employee. The plasterer decides that it would be in his interest as he would not have to tender for work personally, less stress, holidays, sick pay etc so he decides to become an employee as it would work out better for him in the long run. Would this person fall foul of being a disguised employee previously? Where do you draw the line?

Self-employed plasterer has previously declared all his income via SATR and paid all the PAYE / NIC due. It's a completely different taxation arrangement to a director of a Ltd Co taking minimum salary and maxing out their dividends.

I suggest you read up on the difference between the two ways of working...

[Superfly]

How would this differ from this example.

A property development company hires a self-employed plasterer to do some work for them. He works for them for 3 to 6 months. After that time the property development company decide they like the contractors work and decide to take him on full time as an employee. The plasterer decides that it would be in his interest as he would not have to tender for work personally, less stress, holidays, sick pay etc so he decides to become an employee as it would work out better for him in the long run. Would this person fall foul of being a disguised employee previously? Where do you draw the line?

[WordIsBond]

For decades, contractors have done a gig with clients, clients have liked their work, and offered them a perm role. That in itself is no great risk.

If the perm role is identical in work, working practices, and title to the contract role, then it is more problematic, because it suggests it really was an employee role all along. (Not necessarily, it could have been a change in business circumstances and they needed to convert the contract role to a perm role. But most often, it's an IR35 problem.)

In many (most?) cases, the perm role isn't identical but similar enough that there could be an argument. That's where the risk starts to come in.

Personally, I think the risk in your case is somewhat overblown. You aren't going to be through an agent, so that makes it a little harder for them to automatically match you up. You aren't moving to an inside role, or a brolly role, you are moving to perm. I think that also makes it harder to match up.

You aren't moving a month or two before the IR35 changes, HMRC would say that would look suspicious, and those with status changes just before April but staying at the same place are the ones they'd be most likely to target.

Finally, you've got plenty of time to close your company before the reforms come in. If you make this change now and close your company, since it is a company liability, the likelihood of ever being investigated is probably very, very low. To become personally liable, they'd have to pierce the corporate veil. If you've had contract reviews and kept track of any kind of evidence showing you are outside it would be very difficult for them to do that.

If you make the move now, you'll be way, way down the list of their priority targets. If you like the people and like the role being offered, and you've done due diligence on IR35 to this point, take the role and get your company closed sooner rather than later.

[ladymuck]

I personally wouldn't take the risk, and I don't believe a 2-3 month gap would pass muster either.

Depending on your relationship with the client it's possible you could get them to extend - your new end date should ensure you don't fall foul of anything that could (will) take effect from 6 April 2020. I think the revised legislation was changed so that payments for work done under the old rules were not subject to the new rules but I'd look to be out and well clear to ensure there's no ambiguity.

Depending on your field of work the market may not be very good for you so, whilst you may not want to take the risk of a permie job at your client, your options and warchest may not support it.

[crispyfifty]

So, I am currently contracting, and my contract is due to end soon. the engagement has offered me a perm position because they no longer want to use contractors due to IR35 in the UK.

After some research, i noticed that there is a school of thought that if you are moving from contracting to perm with the same org same job title same JD then it is considered a very risky move. As HMRC can join the dots and easily build a case against the contractor resulting in an investigation.
The safest strategy (apparently). Is to either, go perm with another business, go perm with the same business, only with a different role. Or go perm with the same business but create a gap of 2-3 months before starting the same position as a perm.

So; given the scenario above. What would you do if you were in my position?

(a) take the perm position with the same business, same JD. (Accept this risk of being investigated)
(b) Force business to extend my contract until early 2021 (milk the contract before the reform kicks in April 2021)
(c) Walk away, turn down the perm position and wait it out for another opportunity.
(d) None of the above (you have a better suggestion)

In my mind, I have chosen (d) and in my mind already decided not to take this risk. I probably will live off saving for a year or two while I search for either another contract or perm position.

It is a real pity. As I can provide such great value to this business and feel like a can make great changes to it if I were to go perm.