Take redundancy then go back as a contractor

mrweetabix

Morning All

Does anybody have the knowledge to help with the following please?

If you take redundancy on say the 31st Jan 2011 and gte paid for it. Are there any tax implications or conditions to say you can't go back as a contractor straight away? Or do you have to wait for a certain amount of time?

Thanks for any info.

Primrose

I'm unsure of the implications of this because if you go back immediately after redundancy doing exactly the same work and the same hours as you were doing previously but as a contractor, this suggests that the job wasn't redundant in the first place. In which case, you could perhaps appeal against your redundancy and say you were unfairly dismissed.

patman99

If you go back as a contractor, and work the same hours etc. you could be in trouble for breaching HMRC rule IR35.

Afaik there is no rule that states you can't get paid redundancy, then start back with the same employer the next day.
My b-i-l got made redundant, and as he walked out of the office, a manager from another dept offered him a job starting that night.

getmore4less

patman99 wrote: »

If you go back as a contractor, and work the same hours etc. you could be in trouble for breaching HMRC rule IR35.

Afaik there is no rule that states you can't get paid redundancy, then start back with the same employer the next day.
My b-i-l got made redundant, and as he walked out of the office, a manager from another dept offered him a job starting that night.

There would almost certainly be tax implications if any payment was paid tax free , the company would be mad to do this and still pay up redundancy because there would be continuity of employment and they would have to pay up again for the full service if made redundant again.

Comeing back as a proper contractor and not a employee in all but name would be needed to avoid a potential investigation on the tax front.
happens a lot when companies realise that they still need the people for a bit longer.

serious_saver

Check the specific terms of your redundancy agreement. My sister did this but she had to wait 3 months before she could go back.