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US client inside IR35, what are my options?

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    US client inside IR35, what are my options?

    I'd like to work for a US client (no UK presence) on a contract which QDOS has deemed to be inside IR35. I'll be working remotely in the UK. I've come across a few options and I need help figuring out which is best:

    1) Work via umbrella company. Are there any recommended umbrella companies that will accept USD and work under contracts governed by the state of California?

    2) Work via my own limited company, but inside IR35 (PAYE). I suppose I'd need to have professional indemnity insurance which is apparently expensive for US contracts. Plus accountancy fees this would work out more expensive than the umbrella option I assume.

    3) Renegotiate the contract and working relationship to be outside IR35 and work via my own limited company. This is tricky because the client would like to award me with share options which I think would make it inside IR35 always.

    Are there any other options I'm missing? Appreciate any tips.

    #2
    Discussed plenty of times. Play around with the keywords for more specific threads but here is a starter.

    https://www.google.com/search?q=US+c...hrome&ie=UTF-8
    'CUK forum personality of 2011 - Winner - Yes really!!!!

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      #3
      As nluk says, there's a lot of threads already, so it really would be best to read a few of those and then come back with any additional questions...

      Although certainly possible, it's quite hard to imagine a contract for a US client that is inside IR35. I doubt it was the share options alone because this is unlikely to discriminate (many foreign companies offer these to employees and self-employed consultants alike), so perhaps a combination of things.

      One option you don't mention is PAYE Direct (DPNI), which is PAYE, but will be better than (1) because there's no ErNI due by a foreign employer with no UK presence.

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        #4
        My own opinion is it is ridiculous to declare a contract with an overseas company as IR35 caught when the company has no UK presence. I think you wasted your money at QDOS on this. If this is a US start up company, you would be nuts to accept a lower rate and accept share options that are likely going to be worth zip in five minutes time. Get the rate for the job and don't be smooth talked into accepting less. These scenarios have been done many times here.
        Public Service Posting by the BBC - Bloggs Bulls**t Corp.
        Officially CUK certified - Thick as f**k.

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          #5
          Originally posted by geeogi View Post
          I'd like to work for a US client (no UK presence) on a contract which QDOS has deemed to be inside IR35.
          QDOS would have given you the reasons for their assessment. Go back to your client to change those terms and send back to QDOS.
          Do a working practices questionnaire as well, and make sure they also fall outside.

          In the US, approximately 11 out of 12 businesses fail. About 1% of them become unicorns. Forget share options.

          Go for 3, no question about it.


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            #6
            Originally posted by Fred Bloggs View Post
            My own opinion is it is ridiculous to declare a contract with an overseas company as IR35 caught when the company has no UK presence. I think you wasted your money at QDOS on this. If this is a US start up company, you would be nuts to accept a lower rate and accept share options that are likely going to be worth zip in five minutes time. Get the rate for the job and don't be smooth talked into accepting less. These scenarios have been done many times here.
            Agreed - I don't care what HMRC say, "outside UK = outside of scope", cos what are they gonna do.

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              #7
              Originally posted by vwdan View Post

              Agreed - I don't care what HMRC say, "outside UK = outside of scope", cos what are they gonna do.
              I agree in the sense that it's hard for a US contract to be inside. However, bear in mind that the burden of proof is on the taxpayer. So, to answer your question, what they will do is ask for proof. The failure of the client to engage w/ HMRC is not a positive in that sense, assuming they can back-up the claims made by the contractor about working practices.

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                #8
                ok it's looking like outside IR35 + LTD is the standard approach then. Should be able to amend the contract to be outside IR35, given our working relationship most likely is outside. Just asked QDOS and they say that share options can be compatible with outside IR35, so long as they're paid for (not gifted).

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                  #9
                  Originally posted by geeogi View Post
                  ok it's looking like outside IR35 + LTD is the standard approach then. Should be able to amend the contract to be outside IR35, given our working relationship most likely is outside. Just asked QDOS and they say that share options can be compatible with outside IR35, so long as they're paid for (not gifted).
                  Even if they were gifted, it would be neutral if they offered these options to all suppliers and employees alike. As other have noted, they are probably worthless.

                  Comment


                    #10
                    Originally posted by geeogi View Post
                    ok it's looking like outside IR35 + LTD is the standard approach then. Should be able to amend the contract to be outside IR35, given our working relationship most likely is outside. Just asked QDOS and they say that share options can be compatible with outside IR35, so long as they're paid for (not gifted).
                    Ask for money rather than share options. Then invest that money in shares of your choosing inside a SIPP. No tax to pay and you get to own shares for the long term that are actually worth owning.
                    Public Service Posting by the BBC - Bloggs Bulls**t Corp.
                    Officially CUK certified - Thick as f**k.

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