Inside IR35 Change To Outside

dranzer01

Is this possible? I.e. if you take on a contract which is inside, can you change that to outside?

(What are the reasonings as to why companies don't want 'you' to be on outside IR35?)

I spoke to the agency and I remember saying 'Id prefer it on an outside basis' and from memory he said  'that's just how its setup'.


I look forward to any insight on this and how to get your way across stronger.

Marcon

dranzer01 said:

Is this possible? I.e. if you take on a contract which is inside, can you change that to outside?

(What are the reasonings as to why companies don't want 'you' to be on outside IR35?)

I spoke to the agency and I remember saying 'Id prefer it on an outside basis' and from memory he said  'that's just how its setup'.


I look forward to any insight on this and how to get your way across stronger.

It's not your decision as to whether the contract is inside IR35; it is your decision whether or not to accept a contract which is within IR35. 

See https://www.gov.uk/guidance/understanding-off-payroll-working-ir35 which should answer your questions.  Also very helpful is https://www.litrg.org.uk/tax-guides/employment/am-i-employed-self-employed-both-or-neither#toc-ir35-off-payroll-working-rules (scroll down to the section on IR35).

mcpitman

If your role is subject to the same supervision, direction and control as a contracted employee, then you are likely be required to go under IR35.

What is the problem you are trying to solve?

Grumpy_chap

If you are inside IR35, you have no incentive to waive rights under AWR (Agency Worker Regulations).
https://parasolgroup.co.uk/help-me-decide/guides/awr/

dranzer01

mcpitman said:

If your role is subject to the same supervision, direction and control as a contracted employee, then you are likely be required to go under IR35.

What is the problem you are trying to solve?

That being said, what explicitly makes inside and outside different? The sheer fact outside you are more of a 'lone wolf'?

Im a senior business analyst and from experience on research, when that position comes to contracting, it is generally outside IR35 - So for me I was just posing a curious question - 

Grumpy_chap

dranzer01 said:

Im a senior business analyst and from experience on research, when that position comes to contracting, it is generally outside IR35 - So for me I was just posing a curious question - 

I am not sure that I understand that comment, particularly it reads to me to conflict with the first post, but maybe I am reading it wrongly as the day draws on.  zzzz.

If this is not an actual issue but just a question of curiosity from the OP, then there is nothing to actually answer.  The OP may wish to be cautious of any information found through "research" (particularly online) about contracting positions being "generally outside IR35" as the rules around IR35 changed as of April 2021 so articles from prior to that may be incorrect to current status.

Many Clients are deeming contracts as "inside IR35" at present on a virtual blanket basis as they see the "inside" determination as the "safe" approach minimising liability.  As this progresses with time, the Clients may start to see the obligations they now carry for the "inside" determination and the default "inside" may no longer continue.  
Only time will tell.

Marcon

dranzer01 said:

mcpitman said:

If your role is subject to the same supervision, direction and control as a contracted employee, then you are likely be required to go under IR35.

What is the problem you are trying to solve?

That being said, what explicitly makes inside and outside different? The sheer fact outside you are more of a 'lone wolf'?

Im a senior business analyst and from experience on research, when that position comes to contracting, it is generally outside IR35 - So for me I was just posing a curious question - 

If you read the links I gave above, I think that should satisfy your curiosity. If not, googling on your question should bring you a wealth of other relevant links.

Elliott.T123

dranzer01 said:

mcpitman said:

If your role is subject to the same supervision, direction and control as a contracted employee, then you are likely be required to go under IR35.

What is the problem you are trying to solve?

That being said, what explicitly makes inside and outside different? The sheer fact outside you are more of a 'lone wolf'?

Im a senior business analyst and from experience on research, when that position comes to contracting, it is generally outside IR35 - So for me I was just posing a curious question - 

There are a number of factors that make the difference but the main focus comes down to are you doing the same work and subject to the same conditions as an employee.

For example

Do you have a line manager in the business who manages your work? likely inside IR35
Are you focusing full time on this client and have no other work going on? likely inside IR35
Could you decide one morning not to turn up and send someone else to do the work that day instead? If not likely inside IR35

Examples of roles that would fall outside are a software engineer who has been asked to make an application, the company tells him what they want and say we will speak to you in 3 months once its made. They have no control day to day, he doesn't need to work on it himself, he could get someone else to actually do it. That is a true outside IR35 role.

Obviously there are still a lot of companies who are making blanket decisions one way or another usually inside as a previous poster mentioned as they feel it is the "safe option" and limits their liability.

There are a few companies who go the other way as they feel they will be able to hoover up the best contractors by keeping them outside, but they are taking a risk if HMRC ever comes calling.

Sandtree

dranzer01 said:

Is this possible? I.e. if you take on a contract which is inside, can you change that to outside?

(What are the reasonings as to why companies don't want 'you' to be on outside IR35?)

I spoke to the agency and I remember saying 'Id prefer it on an outside basis' and from memory he said  'that's just how its setup'.


I look forward to any insight on this and how to get your way across stronger.

IR35 has been around for years however before the changes last year it was the contractor that had to make the assessment and so if you look at my last client pre the changes they had 150 contractors onboard and so HMRC would need to look at and chase each one individually.

The rules changed last year to say its now the client that has to determine (or the first entity in the UK in the supply chain if the client is overseas) if you are inside or outside. Whilst assessment is still on an individual basis HMRC can hit that previous client and cover 150 contractors in one go and have much greater chances of getting back any monies owed.

If you are "inside" you basically personally have to paid and taxed through PAYE like if you were an employee. If you are outside you can have your monies paid to a LTD and there are various tax efficiencies you can leverage.

You are willing to take the risk of HMRC coming knocking and having to pay a load of back dated tax but many clients arent and therefore will either declare the role is inside or require that you operate via an umbrella which has the same effect.

If the role is inside, its inside, dont go there with the hope of arguing it should be changed to outside. The agency will be much better at doing this than you and will have already tried to persuade them as it makes their job of finding candidates much easier

dranzer01 said:
Im a senior business analyst and from experience on research, when that position comes to contracting, it is generally outside IR35 - So for me I was just posing a curious question - 

Slightly concerning that senior BA doesnt know about IR35 nor seems to be able to do the analysis

No role is "generally outside", it is easier to argue project type role is outside but ultimately it comes down to the client's risk appetite. Most large companies are just saying they dont want to pay their BA's £500/day and then potentially in 3 years time find having to pay all the employment taxes to HMRC if the outside determination is challenged. Consultancies and other smaller companies are less risk adverse and know they can get the best staff for less money by saying the role is outside.