Break between contracts

[Kiwiguy74]

Hello,

My partner has been contracting (Inside IR35) wither her current job for the past 2.5 years. The business is claiming they cannot continue to renew her contract on account of some 2 year rule so have presented her with 2 options.

1) She finishes her current contract at the end of June - and then return to a different role as a contractor - again inside IR35.

OR

2) She finishes her current contract at the end of June - and then return to a different role on a Fixed Term Contract.

My question is - what length of break after she finishes in June is required under either option? Her employer is claiming an as yet undetermined break period is required before she can return.

Many thanks

[ULA]

A contractor inside IR35 is an individual operating as a limited company contractor, when in fact they should be classified as an employee. In other words, a worker inside IR35 is a deemed employee and should be treated as such for tax purposes.

My concern with what you have said about the 2 year rule is that in fact your wife is not a contractor inside of IR35, she is in fact an employee. As an employee you gain employment rights after 2 years of service. This could potentially be why they are trying to leave the break period undetermined.

[Kiwiguy74]

Ok so they shouldn't have let her stay as a contractor past 2 years?
PUtting all that aside is there a law requiring for a certain length of break before rejoing ?

[ULA]

Is your partner claiming travel expenses between home and the client’s premises, if so that is the only other reference to a 2 year rule which is one that she needs to be aware of not the company.

The only thing I can refer you to legally is that under the current provisions of the 1996 Act, continuity of employment will only usually be broken by a break of one clear week between two contracts of employment, where one clear week is to be measured from Sunday to Saturday.

[Kiwiguy74]

No travel expenses are being claimed.
They are saying a break of 2-3 months may be needed?? Does the clean break period need to be that long?

[ULA]

I am not sure why they are saying this amount of time will be needed. May be worth your partner going back and asking why.