Q. I have a current contract running past April, which is outside IR35. Will this need to be renegotiated given it could fall inside the legislation when IR35 reform arrives next year?
If you work with either a public sector body or a medium or large private sector business, there’s no requirement for you to renegotiate your contract with your client. That said, your client will need to determine whether your engagement falls inside or outside IR35 from 6th April 2020.
Should your client not have contacted you to discuss IR35, it’s within your own financial interests to get in touch with them to get a feel for their plans. The sooner you have an idea of where your client thinks your contract belongs, the better.
Let’s say your client decides your contract should sit inside IR35 and they’re unwilling to change their stance. In this scenario, you might want to renegotiate your terms to take into account the extra cost of working inside the legislation. This is completely up to you, however.
Q. If I accept a future contract via umbrella, should I keep my limited company open? If not, what should I do with any retained profit?
It would be premature to close your business down simply because you work through an umbrella company on one contract. Closing down your company is working off the premise that you won’t be able to secure outside IR35 contracts going forward, which isn’t necessarily the case. The work Qdos is carrying out with more than 100 private sector firms suggests there will be tens of thousands of outside IR35 opportunities available after the introduction of reform.
However, if you do choose to close your limited company, it’s best to discuss the financial implications with your accountant.
Q. Lastly, can I work on two separate contracts – one outside IR35 and one via an umbrella?
Absolutely. Just because you work inside IR35 or via an umbrella on one contract, that’s not to say you cannot operate outside IR35 on another. All that matters is that you are doing so compliantly.
This answer was provided by IR35 specialist, Qdos Contractor.