Resident in Guernsey for tax purposes wanting to do contracting in UK

[PeteTsPM]

Morning all, interesting thread and thanks to panders for the question and secwombat for the local knowledge. As someone based in Guernsey and contracting into the UK for a number of years I am interested in the assertion that IR35 "isn't relevant".

IR35 determination is now with the end client and being Guernsey resident doesn't seem to stop you being caught up in it. I totally agree the best route would be to get a NT tax code etc but that doesn't seem possible even with a UK NI (which I have from my youth).

The only way to avoid the IR35 issue is to remove the PSC connection and I wondered if it was worth creating a Guernsey based umbrella that could remain tax resident in Guernsey whilst avoiding IR35. Yes we'd loose the dividend distribution but under self employed laws in Guernsey that isn't really worth diddly and at least we could work into the UK and remain Guernsey tax resident outside of IR35.

[Lance]

<snip>
I am interested in the assertion that IR35 "isn't relevant".

IR35 determination is now with the end client and being Guernsey resident doesn't seem to stop you being caught up in it.<snip>

there's a difference between the legal relevance of IR35 in so far as UK law would consider it, and a client's risk attitude where it's easier to just put everyone as inside.
That's why you get caught up in it. Client choice.

[secwombat]

If you are using a Guernsey Ltd Co, and are personally tax resident in Guernsey, than IR35 tax rules don't apply when interacting with a UK company, as it's strictly a B2B relationship - i.e. UK tax cannot be applied to an offshore entity (and IR35 is a personal tax issue - not company). Maintaining that tax residency, whilst keeping a client happy is another matter.

Using a Guernsey umbrella won't alter that relationship (there are some over here - but primarily for things like seafarers, which seemingly is a big tax wease here - I'd suggest avoid). I agree about the dividend distribution item being irrelevant for a Guernsey company - it's treated as personal income so fully taxed for Income & Social Insurance.

Given the current tax discussions going on in Guernsey, I suspect that any advantage we might have over just going through a UK umbrella and taking the hit, are rapidly diminishing (something which the politicians don't / won't understand)