Status Determination

[bazuzu]

Hi All,

In the good ol' (pre-IR35) days, to cover my back I always got my contract evaluated by an independent IR35 specialist

In this new world, the responsibility for status determination now rests with the client, so if the client assures me the contract is outside IR35, do I still need to get it checked? What kind of proof can I request from the client (apart from a written email confirming the contract is outside IR35)?

Thanks!

[northernladuk]

No you don't really As long as you have a copy of the rhe SDS which the client filled in in good faith then you are done. What you have to make sure, however, is that when you get there the working practices match the SDS. It would still be a good idea to get the contract checked over though. If they've got a substitute clause that's fettered for example then I wouldn't be comfortable with that.

You will however need your IR35 insurances to cover previous years of outside work pre IR35

[bazuzu]

Thanks a lot, they haven't given me an SDS, it's an EU company for a fully remote IT contract, do they still need to provide that?

[northernladuk]

Thanks a lot, they haven't given me an SDS, it's an EU company for a fully remote IT contract, do they still need to provide that?

https://www.markeltax.co.uk/industry...nt-is-overseas

The government took note of these concerns and in response clarified the issue in the Finance Bill 2020 to exclude wholly overseas organisations with no UK presence from having to consider the off-payroll working rules. This means that where the end client is wholly overseas, the old rules will apply and it will be the responsibility of the individual’s limited company to determine IR35 status. This will come as a huge relief for many contractors.

We must then look to see what the legislation says that to be “wholly overseas” a client must show:

• they have no UK connection immediately before the beginning of the tax year; or
• if the client is a resident in the UK or has a permanent establishment in the UK, they will have a UK connection

This means where a contractor has an end client based overseas, which has no UK connection, such as a UK branch or office, the new IR35 reforms will not apply and the contractor must apply the old rules.

If, however, the end-client based overseas has a UK connection, such as a branch or office, it will still be the responsibility of the end client to determine status and issue a status determination statement. The overseas client will therefore be liable for the tax and NICs if it fails to meet its responsibilities under new rules and HMRC will collect this debt through the UK connection.

[bazuzu]

Awesome, thank you so much!