Can I decrease the IR35 risk if offshore software developers work through my Ltd?

[Max E]

Hi

I am a software developer. I am a contractor and work through my limited company.
My current client has offered a 1 year extension. I am concerned about IR35 risks.

The client needs more software developers and struggles to hire them in London.
I could help the client to find one or more offshore developers in Eastern Europe.

Offshore developers might work through my Ltd company. Would it decrease my IR 35 risks?

Thanks

M

[BlasterBates]

Yes as you are acting like a real business.

Although each contract is reviewed under its own merits, having read a few judgements on IR35, the judges are looking at the whole context, i.e. if the contractor has his own office and is working on other contracts, doing his own marketing etc and it will weight their decision to judging against IR35, in particular if you are placing contractors for the same client with whom you have the contract. Clearly if you are earning margin on placing other contractors, then you are not like one of the perms.

I think any investigator would probably move on if he were to find out you had a load of employees.

[TheCyclingProgrammer]

I think it would help, but what is making you worried? Did you have your contract and working practices reviewed?

[TheFaQQer]

Offshore developers might work through my Ltd company. Would it decrease my IR 35 risks?

There's not enough case law around it, to give a definitive answer. My gut feeling would be that an investigation would be shut down because you would be more like a "real" business.

However, the three basic tenets of IR35 are still there - is there mutuality of obligation, direction and control, and do you have a right of substitution. If you fail all three of those, then you could still fail.

[northernladuk]

Yes but I would question your grasp on IR35. What is it about a year long contract that is worrying you. The duration should not be a flag if all other aspects are in place.

IMO if you knew enough about IR35 you wouldn't need to do any of this. It might reduce your IR35 risks but it's a whole load of crap to deal with and can greatly increase other risks i.e. you not getting binned for the arrangement to go sour.

If you see an opening and can make good money AND provide a valuable service to the client then maybe try it but do NOT do it just for IR35 reasons.

[d000hg]

Yes but that should NOT be your reason for doing this, only a very minor side-benefit.