EU Client

[As100]

Hi,

I'm new to the contracting side and therefore would be grateful for any assistance.

I'm considering taking on a new client based in the EU. I will be primarily UK based and I have a UK limited company. I would be grateful if you name any obvious pitfalls or things that I should consider whilst negotiating the contract.

I am aware of IR35, however, when I spoke to three different accountants I got three different answers as to what's allowed and what's not which has left me quite confused.

Thank you so much in advance.

[jamesbrown]

Couple of pointers. Don't speak to your accountant about IR35, because they're not specialists, they're generalists (some of them have excellent knowledge of IR35, others not). Speak to a tax specialist with expertise in IR35, like Abbey Tax, Bauer and Cottrell, Lawspeed, Egos or countless others. You'll need a full contract review that considers working practices (I would personally advise that you avoid the cheaper reviews that consider the contract only).

Make sure you understand the clauses about jurisdiction (which courts will preside) and governing law (which law will be used). Assuming you're based in England, you ideally want English law to govern, with the courts in England and Wales to have jurisdiction. If you're looking for a contract template, consider those available from IPSE (you may want to consider joining IPSE too, but that's a separate question).

Make sure you have the correct PI insurance in place.

Finally, I note that you say "primarily" in the UK. I won't open that can of worms, but beware that cross-border tax is complex (personal and corporate and how they relate for a micro-business of which you're a director).

[As100]

Couple of pointers. Don't speak to your accountant about IR35, because they're not specialists, they're generalists (some of them have excellent knowledge of IR35, others not). Speak to a tax specialist with expertise in IR35, like Abbey Tax, Bauer and Cottrell, Lawspeed, Egos or countless others. You'll need a full contract review that considers working practices (I would personally advise that you avoid the cheaper reviews that consider the contract only).

Make sure you understand the clauses about jurisdiction (which courts will preside) and governing law (which law will be used). Assuming you're based in England, you ideally want English law to govern, with the courts in England and Wales to have jurisdiction. If you're looking for a contract template, consider those available from IPSE (you may want to consider joining IPSE too, but that's a separate question).

Make sure you have the correct PI insurance in place.

Finally, I note that you say "primarily" in the UK. I won't open that can of worms, but beware that cross-border tax is complex (personal and corporate and how they relate for a micro-business of which you're a director).

Thank you for the advice. I suspect that it will be Dutch/EU law (as this is where the client is based), I think it will be challenging to put in English law but will ask the question. The project will involve some travel, but I will be a UK resident/domiciled for tax purposes.

Finally, it's intended to be a long term project (both sides will be able to give a notice period to terminate). Any thoughts on including timelines in contracts?

[Craig@Clarity]

Thank you for the advice. I suspect that it will be Dutch/EU law (as this is where the client is based), I think it will be challenging to put in English law but will ask the question. The project will involve some travel, but I will be a UK resident/domiciled for tax purposes.

Finally, it's intended to be a long term project (both sides will be able to give a notice period to terminate). Any thoughts on including timelines in contracts?

Just to add here, if you're working abroad in the EU, I would recommend seeking advice from an accountant in that country as to what you need to do in order not to be deemed subject to their tax rules. I'm aware Germany have draconian rules if you're in the country working for a certain length of time and have a feeling similar rules exist in Holland. Also, bear in mind UK Tax residency rules if you're out of the country for a long period of time.

It's obviously to veteran's here, but if you're working through your UK limited company and contracting abroad, you're able to claim the travel and accommodation costs assuming it's a temporary workplace etc etc.

[As100]

Just to add here, if you're working abroad in the EU, I would recommend seeking advice from an accountant in that country as to what you need to do in order not to be deemed subject to their tax rules. I'm aware Germany have draconian rules if you're in the country working for a certain length of time and have a feeling similar rules exist in Holland. Also, bear in mind UK Tax residency rules if you're out of the country for a long period of time.

It's obviously to veteran's here, but if you're working through your UK limited company and contracting abroad, you're able to claim the travel and accommodation costs assuming it's a temporary workplace etc etc.

Thank you Craig.

Just to add here, if you're working abroad in the EU, I would recommend seeking advice from an accountant in that country as to what you need to do in order not to be deemed subject to their tax rules. I'm aware Germany have draconian rules if you're in the country working for a certain length of time and have a feeling similar rules exist in Holland. Also, bear in mind UK Tax residency rules if you're out of the country for a long period of time.

It's obviously to veteran's here, but if you're working through your UK limited company and contracting abroad, you're able to claim the travel and accommodation costs assuming it's a temporary workplace etc etc.

Thank you for your message. I will be UK based but will travel to meet with the client from time to time. At this point, I don't expect to be outside of the UK for a long period of time.

[As100]

Ir35

Thank you Craig.



Thank you for your message. I will be UK based but will travel to meet with the client from time to time. At this point, I don't expect to be outside of the UK for a long period of time.

Apologies, tried to search for this but was a bit confusing.

There are a few remaining points that I'd like to check if allowed and to keep me outside of IR35.

I require a laptop and phone to do the work for the client.

They would like to provide the following.

1. Hot desk, I would pay monthly and expense it as they don't have a UK office and I need somewhere to work

2. Email address and business cards in the client's name

3. Phone, they would provide the handset and then I would expense the monthly mobile contract.

4. They would provide the laptop for security reasons

5. LinkedIn, any suggestions on job title for example advisor or consultant (this would appear on the business cards, email signature)

6. I've suggested not to be on the website, which they are fine with

In this arrangement, would the client be liable to PAYE?

Thanks a lot in advance.

[northernladuk]

Apologies, tried to search for this but was a bit confusing.

There are a few remaining points that I'd like to check if allowed and to keep me outside of IR35.

Did you speak to an IR35 specialist as advised?

I require a laptop and phone to do the work for the client.

Pretty irrelevant for IR35

They would like to provide the following.

1. Hot desk, I would pay monthly and expense it as they don't have a UK office and I need somewhere to work

I'd guess a minor point to being inside. I can see HMRC trying to argue paying for your office is a bit permie like. Supplying your own office space would be better.

2. Email address and business cards in the client's name

Email not a problem. Business cards is not good. They give them to permies, not contractors. I'd avoid this if at all possible.

3. Phone, they would provide the handset and then I would expense the monthly mobile contract.

A minor point to being inside. You should really provide your own kit but it's not a biggie.

4. They would provide the laptop for security reasons

IR35 neutral

5. LinkedIn, any suggestions on job title for example advisor or consultant (this would appear on the business cards, email signature)

It's not a job title. You are providing a service, not a job. You can put what ever role you are doing but don't let them bully you into making your linkedin look like you work for them.

6. I've suggested not to be on the website, which they are fine with

IR35 neutral

In this arrangement, would the client be liable to PAYE?

Why would you think they will be liable. IR35 is your tax issue not the clients.

[WordIsBond]

2. Email address and business cards in the client's name
5. LinkedIn, any suggestions on job title for example advisor or consultant (this would appear on the business cards, email signature)

I use client email for communicating with their clients and use 'Consultant' in the signature.`

I also use client email for communicating with others working on a project with me, but my own LtdCo email for discussions around contracts, new project proposals, etc. In other words, when I'm working as part of a team I'll communicate with team members using team email but when I'm wearing my 'Remember, I'm independent and running my own business' hat, I use my own email.

1. Hot desk, I would pay monthly and expense it as they don't have a UK office and I need somewhere to work
3. Phone, they would provide the handset and then I would expense the monthly mobile contract.

Don't expense this stuff to them. Increase your rate a little bit, and have your own company pay it. It isn't, on its own, going to change the IR35 picture but it hurts that picture to have you expense everything and helps when you pay the costs yourself.

I do the same with travel costs. My typical contracts with American clients say that they include up to two trips to America a year, and anything beyond that has to be negotiated. MyCo pays for those trips. The cost is built into our fees.

It's to their advantage to make sure everything is as arms-length as possible. They don't want to end up being held liable for employer NI in the UK someday, and the retro tax bridge has already been crossed. So they should be on board with any changes that help the picture.

[As100]

[QUOTE=northernladuk;2609152]Did you speak to an IR35 specialist as advised?

Thanks for the prompt response.

I spoke to three advisors, all gave different answers on what's allowed anc what's not. I'm speaking to another one today. Is it worth getting the IR35 insurance? And if so, which insurance provider?

Pretty irrelevant for IR35

They would like to provide the following.

I'd guess a minor point to being inside. I can see HMRC trying to argue paying for your office is a bit permie like. Supplying your own office space would be better.

They don't have a GBP account, so said it was easier this way.

Email not a problem. Business cards is not good. They give them to permies, not contractors. I'd avoid this if at all possible.

They are quite keen on the business card, as the role involves selling to their prospective customers

A minor point to being inside. You should really provide your own kit but it's not a biggie.

Thanks.

IR35 neutral

It's not a job title. You are providing a service, not a job. You can put what ever role you are doing but don't let them bully you into making your linkedin look like you work for them.

I was thinking either sales consultant or sales advisor to the client

IR35 neutral

Why would you think they will be liable. IR35 is your tax issue not the clients.[/QUOTe

One of the tax advisors mentioned that the client could be affected by PAYE.