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UK sales manager of Cyprus company

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    #11
    Originally posted by Lance View Post
    Yes that works. More importantly for you is that it’s not your liability.
    Thank you for your reply. We also would like to use the variant and will try to clarify if it works for our sales partner and his LTD.
    It is quite excessive for us to establish our tax presence in the UK now

    Comment


      #12
      Originally posted by Lance View Post
      Yes that works. More importantly for you is that it’s not your liability.
      Maybe. Until the public sector "reform" is applied to the private sector. Then, it becomes the fee-payer's liability, and the fee-payer being a foreign company is not necessarily always going to be a protection.

      It's not that far a step from there to deciding (especially if a different government is in power) that foreign fee-payers in these cases are actually operating a sham and that evil multinational corporations are therefore to be viewed as having established a presence in the UK when they have IR35 "employees" here. Therefore, having established a presence, they are liable to the entire UK tax regime.

      OP, in the short run, Lance's suggestion probably works very well. If you are going to pay him extra, make it explicit in the contract that this engagement is inside IR35 and that his company is being compensated for the costs of operating IR35. Also make it explicit that his company is responsible for all compliance with UK tax and employment law. That will make it very hard for anyone to ever blame you if anything goes wrong. If he doesn't pay the entire tax, he'll have no room to argue if HMRC come calling, and no way to ever come back at you for anything.

      Whether that will work in the long run may depend on future elections. What I said above may sound like paranoia, but I truly am paranoid about Komrade Korbyn.

      Comment


        #13
        Originally posted by WordIsBond View Post
        Maybe. Until the public sector "reform" is applied to the private sector. Then, it becomes the fee-payer's liability, and the fee-payer being a foreign company is not necessarily always going to be a protection.

        It's not that far a step from there to deciding (especially if a different government is in power) that foreign fee-payers in these cases are actually operating a sham and that evil multinational corporations are therefore to be viewed as having established a presence in the UK when they have IR35 "employees" here. Therefore, having established a presence, they are liable to the entire UK tax regime.

        OP, in the short run, Lance's suggestion probably works very well. If you are going to pay him extra, make it explicit in the contract that this engagement is inside IR35 and that his company is being compensated for the costs of operating IR35. Also make it explicit that his company is responsible for all compliance with UK tax and employment law. That will make it very hard for anyone to ever blame you if anything goes wrong. If he doesn't pay the entire tax, he'll have no room to argue if HMRC come calling, and no way to ever come back at you for anything.

        Whether that will work in the long run may depend on future elections. What I said above may sound like paranoia, but I truly am paranoid about Komrade Korbyn.
        There is no such thing as UK law.

        Scotland and NI are separate UK legal jurisdictions. While most employment law in England and Wales is mirrored, NI does have different employment laws. Also the Scottish parliament has tax raising powers that can effect income tax and this is not applicable to the other legal jurisdictions in the UK.

        You also don't want to mention employment law because even though he's a
        contractor in some legislation e.g. Health and Safety he's covered as a worker so the client could still be found liable for breaches regardless of what is written in the contract.

        The best thing to do is to get a contact solicitor based in England to draw up some terms to make it clear he's liable for all taxes demanded and due to be paid to HMRC as the contract falls within IR35 legislation, and his tax liability under the contract is under the laws of England as that's where he is based.
        "You’re just a bad memory who doesn’t know when to go away" JR

        Comment


          #14
          I would certainly NOT engage a London solicitor. I'd draw up the contract under Cyprus law. And if the sales manager complains about that, offer him another 2% to accept it. This company does not want to end up dragged into a UK court.

          And I WOULD mention "UK" law specifically. Courts in Cyprus aren't going to care about England/Wales vs Scotland vs NI. This company in the UK is going to be responsible for whatever needs to be done under any of them. The sales manager is an employee or officer of the UK company and it is their responsibility to take care of all that. The Cyprus company is paying the UK company well to handle all of that.

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