Overseas and IR35

[Winger300]

Is this the official guidance now?

Off-payroll rule exclusion for UK contractors' wholly overseas clients 'could be a loophole'

[jamesbrown]

Is this the official guidance now?

Off-payroll rule exclusion for UK contractors' wholly overseas clients 'could be a loophole'

No, that seems to be a bunch of commentators punting on the review.

But, yes, the updated information from HMRC is that the existing rules (or small business provisions) will apply to fully overseas supply chains. Will need to wait for the amended Finance Bill to say anything more than that.

[lecyclist]

deepblueuk,
I'm in a similar position in the EU, with many years of non-residence, working for a UK client through my own UK limited company, with occasional site visits to the UK.

Assuming you have checked the HMRC statutory residence test [ RDR3: Statutory Residence Test (SRT) notes - GOV.UK ], typically the most pertinent area will be section 4, related to number of ties, this will give you an idea of how many days you can be in the UK and remain non-resident. The number of days you mentioned you will be in the UK is nothing to worry about (and could probably be much greater if required.. see link), and you are clearly outside IR35.

lecyclist

[somsok]

Hi guys, what's your take on 6 and 7?

6) UK-based: Client, PSC --- EU-based: Contractor --- IR35 applies: ? (potentially?)
7) UK-based: PSC --- EU-based: Contractor, Client --- IR35 applies: ? (probably strange scenario)

I live in EU where I pay personal tax from paying dividends. But my PSC is in UK where I pay corporate tax and national insurance. Does IR35 apply at all? Thanks!

[GhostofTarbera]

Hi guys, what's your take on 6 and 7?

I live in EU where I pay personal tax from paying dividends. But my PSC is in UK where I pay corporate tax and national insurance. Does IR35 apply at all? Thanks!

Depends on your working practices


Sent from my iPhone using Contractor UK Forum

[somsok]

The end client is in UK. I'm treated more like an internal resource rather than external company providing services. I'm sure that I would find myself inside IR35 if I lived in UK - no doubt about it. But I wonder if IR35 applies to me if I work 100% remotely and live outside of UK.

[Lance]

I would imagine that your end client would determine you as inside. If not no other reason than your personal tax residency isn't their problem, only that they pay a UK LTD.

IR35 is a legislation against the company, so I'd say that HMRC would find you inside as well and charge you accordingly. How that would stack up against you personally is something you'd probably need a lawyer for.

[jamesbrown]

There needs to be a liability to tax you personally. If you're not UK resident and the work is done outside the UK, there is no liability to tax. IR35 does not change the rules surrounding UK tax residency (the draft legislation proposed to introduce a deemed UK residency provision for overseas clients, but it looks like that will disappear).

You are responsible for determining your own IR35 status and that will also now apply from April 2021 if the supply chain is fully overseas. However, if there is a UK client, they may choose not to play ball and may assume (and assert) that you're inside IR35 even without a liability to tax. Until then (and even after then), there shouldn't be a liability.