Redundancy then Contractor

chetman

Hello All

I am hoping someone can help me with some advice.

I am in the process of being made redundant from my current role, the circumstances are somewhat complex but are as below.

1. My current role as a Service Delivery Owner/Manager was actually made redundant last year (November) as part of a company takeover
2. I was asked to remain with the new company as a permanent employee on a business continuity role. I have asked HR and no job description seems to exist for this aside from it being the same role I was doing before with some handover to other teams of some of my duties
3. I am due to officially leave on March 31st when my business continuity role ends.

The company now want me to stay on as a contractor as of April 3rd. My concern is obviously if I am in IR35 or not?

The role as of April is a project manager role to perform some specific tasks until completion. These will be added to my new job description. I will also work from home 100% where as the above roles were office based.

So my questions are really around if this means I will be ok around IR35 and not have to pay tax on my redundancy package (the portion that is exempt that is)

What do i need to do to make sure this is ok?

Any help appreciated.

Thanks
CM

isplumm

Hi

To me it looks like you could be - go & look at http://www.contractoruk.com/ they have a forum that might help.

Also look at SJD website - they have lots of info about being a contractor - http://www.sjdaccountancy.com/about/ourservices/sjd_contractors_guide.html?gclid=Cj0KEQjwnsPGBRDo4c6RqK-Oqu8BEiQAwNviCaaqA7Wq5xPmUhj5bdxkXe1XQr7kiZyk-bshsjYH7p8aAgvR8P8HAQ

Mark

chetman

Thanks for this, I will check those links out.

I spoke to an accountant today who will be helping me setup my own company to then contract from. He seems to think I will be ok.

From what it looks like to me the risk is minimal and the new job is different enough. But that nobody can say for sure either way.

isplumm

Hi

Ok - have you spoken to a specialist like SJD or put the same question on that forum I mentioned?

Although it is a different role, you are working for the same company - HMRC may just see it as a way of avoiding both you & client from paying tax - especially as there is no gap in service - I would make sure that any schedule / description of role ONLY talks about your new role - also make sure contract has the normal things such as right to substitution etc (http://www.contractorcalculator.co.uk/contractors_right_of_substitution.aspx)

Mark

Majestic12

This situation screams IR35 and is the reason (amongst others) why the legislation was introduced in the first place.

I believe the risk is very high being a former employer. Good on you for getting an accountant but you need to get your contract checked on conditions - check out Qdos

Again, nothing wrong with working for a former employer as a LTD contractor but this will almost certainly be inside IR35 and you would need to make the necessary deemed payment at the end of the tax year. But speak to Qdos first.

chetman

Thanks All, i will check all the tips out.

Everyone I have spoken to seems to think it will be ok but I will gather all the advice and make sure I'm covered.

:beer: