Help please with IR35 Scope

[jamesbrown]

I think this is trickier than it first looks.

First, your PSC is based in the UK. Second, I see this:

majority of the time from the Netherlands.

What does that mean? Do you pass the Statutory Residence Test (RDR3)? It is now comparatively (to pre-2013) easy to attain UK tax residency and comparatively hard to lose it.

Why do you have a UK PSC? That suggests some sort of attachment to the UK that might not play well with RDR3.

Finally, the test for NICs is (SSCBA 1992 s.2(1)(a)):

a person who is gainfully employed in Great Britain either under a contract of service, or in a office (including elective office) with general earnings

IR35 is a company tax, not a personal tax, but I take this to mean that the worker needs to be a person employed in GB and that the client being based in GB is not sufficient.

However, this is one where you can't really rely on a forum like this. We're well-meaning, but not tax experts and especially not at the interface of multiple pieces of legislation like this.

Perhaps a more pertinent question is whether your supply chain is willing to budge. To me, it sounds as though it isn't.

You could try Sue @ IPaye who is one of our resident experts and posts here fairly regularly (no connection, but that would be paid advice unless she is feeling generous ).

[jamesbrown]

Honestly, I can see why your supply chain would be very wary about this.

What happens if you subsequently become UK resident and they have applied the rules incorrectly?

Ordinarily, based on the draft legislation (post-April), the liability is with the Fee Payer for failing to collect a deemed payment.

Perhaps they could argue fraud (worker said they were non-UK resident when they were in fact UK resident), but why would they accept that risk?

[GhostofTarbera]

Sorry to chase - anyone have any idea if there's anyway my situation could be deemed out-of-scope? I would need to substantiate presumably as well so assume it would need to be something written in statue or confirmed by HMRC.

It just seems insane that a UK company could employ for example a French worker who provides services from France to a UK client and the full revenue from that engagement is considered for IR35 (and by many organisations auto ruled inside or would refuse to even have a contract with the UK PSC).

You are in scope

You will be under an umbrella

You won’t be able to pay Dutch tax

Your agent won’t care (or client)

You have a current illegal setup to avoid tax (you might go to jail under Dutch law)

They will find out

You are fecked


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[GhostofTarbera]

You are in scope

You will be under an umbrella

You won’t be able to pay Dutch tax

Your agent won’t care (or client)

You have a current illegal setup to avoid tax (you might go to jail under Dutch law)

They will find out

You are fecked


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Ohhh and your client is fecked also when Dutch HMRC find out (I’ve seen them in a action in Amsterdam when I worked there for 4 years)

As they have not checked you out


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[BR14]

yep the belastingsdienst are BAAAAD mofo's
took me a year to get them off my back, just for a simple mistake on my tax return.
(the hague - 12 years)

[GhostofTarbera]

yep the belastingsdienst are BAAAAD mofo's
took me a year to get them off my back, just for a simple mistake on my tax return.
(the hague - 12 years)

Indeed

Op is looking for another dodge, unfortunately his options are closing

He could

Come to live outside Netherlands and continue


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[nicke1]

You are in scope

You will be under an umbrella

You won’t be able to pay Dutch tax

Your agent won’t care (or client)

You have a current illegal setup to avoid tax (you might go to jail under Dutch law)

They will find out

You are fecked

Thanks again for all the replies.

To clarify, I moved to the Netherlands over five years ago. I own property here, I don't own property in the UK. Children are schooled here, etc. I spend minimal time in the UK so have no concern over tax residence, I'm clearly tax resident and have had an NT tax code from the HMRC for the last year fives.

You keep repeating the same points - the Dutch Belastingdienst already know my set-up. I've interviewed with them. There is not a case of them finding anything out.

Yes, the UK company may have a corporation tax liability in the NL, yes NL tax could push for this but pragmatically I'm avoiding this by ensuring there is NO profit in the UK company. For example in this tax year my salary is 30k higher than revenue, the company will make a loss - full NL tax is paid on that salary.

My current set-up does not avoid tax - by declaring a higher salary in the NL than revenue I'm paying more in the NL that I would otherwise. This is financed from retained earnings.

Also, why do you say I won't be able to pay Dutch tax? The umbrella would process me using the services of a Dutch payroll company exactly as I'm doing at the moment.

Indeed

Op is looking for another dodge, unfortunately his options are closing

He could

Come to live outside Netherlands and continue

Why do you state I'm looking for another dodge? I'm simply trying to understand given I live in the NL whether I am out of scope of IR35, etc.

Being ruled inside won't materially change anything other than create a load of additional administration. I have an NT tax code therefore no taxes to withhold in the UK by the agent/payer.

The only reason I do not currently have an NL company is because it adds another layer of admin and professional fees. And as stated above I will probably (for other reasons) create the BV this year. I would still need to have the UK entity though hold the contract with the agent as most UK agents will not contract with an overseas entity - therefore as I covered above I need an inter-co charging between my UK&NL companies.

[GhostofTarbera]

Help please with IR35 Scope

Thanks again for all the replies.

To clarify, I moved to the Netherlands over five years ago. I own property here, I don't own property in the UK. Children are schooled here, etc. I spend minimal time in the UK so have no concern over tax residence, I'm clearly tax resident and have had an NT tax code from the HMRC for the last year fives.

You keep repeating the same points - the Dutch Belastingdienst already know my set-up. I've interviewed with them. There is not a case of them finding anything out.

Yes, the UK company may have a corporation tax liability in the NL, yes NL tax could push for this but pragmatically I'm avoiding this by ensuring there is NO profit in the UK company. For example in this tax year my salary is 30k higher than revenue, the company will make a loss - full NL tax is paid on that salary.

My current set-up does not avoid tax - by declaring a higher salary in the NL than revenue I'm paying more in the NL that I would otherwise. This is financed from retained earnings.

Also, why do you say I won't be able to pay Dutch tax? The umbrella would process me using the services of a Dutch payroll company exactly as I'm doing at the moment.




Why do you state I'm looking for another dodge? I'm simply trying to understand given I live in the NL whether I am out of scope of IR35, etc.

Being ruled inside won't materially change anything other than create a load of additional administration. I have an NT tax code therefore no taxes to withhold in the UK by the agent/payer.

The only reason I do not currently have an NL company is because it adds another layer of admin and professional fees. And as stated above I will probably (for other reasons) create the BV this year. I would still need to have the UK entity though hold the contract with the agent as most UK agents will not contract with an overseas entity - therefore as I covered above I need an inter-co charging between my UK&NL companies.

Because you have lied to Dutch HMRC

You are inside

Good luck fella in jail

See you there


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[ladymuck]

I think you need to take professional advice, not free advice from amateurs on an internet forum.

[nicke1]

Because you have lied to Dutch HMRC

You are inside

Good luck fella in jail

See you there


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Lied about what? Are you actually reading my replies?

I’ll reiterate once more - the Dutch tax office is fully aware about my situation. I have not lied about anything. I have paid a significant amount of additional NL than I would have to.