Switching to daily rate on Tier2 Gen

[adi27]

Hello,

I'm currently working on a permanent role and being offered a new job by an employer who is ready to sponsor my Tier 2 VISA . They are also OK to provide an year's contract.I would like to work on a daily rate rather than on a permanent basis. My question is, given the situation, it is possible for me to work on a daily rate. Are there any restrictions w.r.t Tier2 which might not let me do this. Any advice will be much appreciated!

Thanks
Adi

[CR001]

Daily rate usually implies 'Contracting' under a limited company/umbrella company?

How will you pay your tax/NI etc?

[adi27]

Yes, I mean contracting.

On your question- "How will you pay your tax/NI etc?"... I'm not sure to be honest. What are the ways I can do this legally?

[CR001]

You are not permitted to contract for an 'umbrella/ltd company' or 'third party agent/company' and contract on Tier 2 General. It is illegal.

You can only work for your sponsor on PAYE.

If a company sponsoring you is charging you a 'CoS' fee or a monthly commission/fee from your salary, then they are not a genuine sponsor either.

[adi27]

Yes, but my situation is that I will be working directly for my sponsor. And no, they are not charging me anything from my COS. It is a genuine opening, which I will be filling in. Only thing is that they are OK for me to work on a daily rate and agree to a period of contract. Will it still be considered illegal? Will they not be able to pay me directly in this case? I don't really understand how taxation works for contracting. Sorry, if I sound stupid.

[CR001]

You are required to be on PAYE and meet the relevant minimum salary required per your SOC. Suggest speak to the HR/Payroll team, but most 'contracting' jobs are day rates and you invoice the company and not 'annual salary PAYE'.

[Wanderer]

Yes, but my situation is that I will be working directly for my sponsor. And no, they are not charging me anything from my COS. It is a genuine opening, which I will be filling in. Only thing is that they are OK for me to work on a daily rate and agree to a period of contract. Will it still be considered illegal? Will they not be able to pay me directly in this case? I don't really understand how taxation works for contracting. Sorry, if I sound stupid.

You can't do this because that would mean the only way to pay your tax is by being self-employed, which won't work as it's forbidden under T2 or by limited company/umbrella also forbidden

In addition being self emplyed mean you are unable to be sponsored (you can't sponsor yourself) nor if under Ltd/brolly your Ltd/brolly cannot sponsor you as they are not licenced sponsors.

I'd be very wary, as there are no good reasons why a sponsor company would encourage it's staff to work this way, as even if it were possible, you'd lose all employment rights, sickness entitlement, employers NI payments on your behalf, holiday pay and employer pension contributions.

Then you'd have Fri-Mon IR35 issues to think about, too.