Contracting inside Ir35 with a Canadian Company

[IMNEW]

Howdy, I'm looking for some guidance, please.

I've been recently laid off as an employee of a company and am lucky to have been offered a new role with a Canadian-based Company. The tricky part is that they do not have a UK business entity and don't plan to for around 12 months. They have asked for me to contract with them, however, they appear to be unfamiliar with the implications of IR35. The role would potentially be deemed inside IR35.

A few questions:

1) if I set up a limited company would I be able to contract with the end client and pay myself as inside IR35 from within my company (all relevant PAYE / tax deductions)
2) technically the contract would see my Ltd company invoicing over £90,000 per year, should I assume I'd need to be VAT registered and charge the end client VAT
3) As I'm planning to pay myself PAYE and not take dividends would that mean I need not worry about corporate tax?
4) are three any reputable umbrella companies that could administer this type of contract internationally?
5) anything else I need to consider in this situation?

thanks in advance

[northernladuk]

You need to find out what the status is as it is key. Potentially is no good.

Does this company have an UK connections? A satellite office? UK arm or something. If it does they will need to do a determination. If they are wholly overseas then it's down to you to do the determination. Note that this does not automatically mean you are outside. You still need to do the diligence to decide.

Are you direct with them or is there an agent involved?

[IMNEW]

northernladuk thanks for responding - they only have an entity in Canada nothing in the UK. there is no agent involved. . By the looks of the role, it would be deemed inside Ir35.

working on the basis of this contract being deemed inside Ir35, my questions are:

1) if I set up a limited company would I be able to contract with the end client and pay myself as inside IR35 from within my company (all relevant PAYE / tax deductions)
2) technically the contract would see my Ltd company invoicing over £90,000 per year, should I assume I'd need to be VAT registered and charge the end client VAT?
3) As I'm planning to pay myself PAYE and not take dividends would that mean I need not worry about corporate tax?

any further advice or guidance on this would be welcome :-)

[hobnob]

Technically it is possible to be paid via your own limited company, then take everything as PAYE (rather than dividends). The key phrase is "deemed payments". However, if you don't have a company yet, there's no point setting one up just for this. It would make life much simpler just to use an umbrella.

I don't know whether there are any umbrella companies who specialise in overseas clients. I suggest that you look through that section of the forum:
Umbrella Companies - Contractor UK Bulletin Board
You can then decide which ones look reputable (e.g. Clarity) and email/phone them to ask about your specific situation.

[Lance]

Technically it is possible to be paid via your own limited company, then take everything as PAYE (rather than dividends). The key phrase is "deemed payments". However, if you don't have a company yet, there's no point setting one up just for this. It would make life much simpler just to use an umbrella.

I don't know whether there are any umbrella companies who specialise in overseas clients. I suggest that you look through that section of the forum:
Umbrella Companies - Contractor UK Bulletin Board
You can then decide which ones look reputable (e.g. Clarity) and email/phone them to ask about your specific situation.

+1 for this ^^^^^^^^^^

[wattaj]

Technically it is possible to be paid via your own limited company, then take everything as PAYE (rather than dividends). The key phrase is "deemed payments". However, if you don't have a company yet, there's no point setting one up just for this. It would make life much simpler just to use an umbrella.

I don't know whether there are any umbrella companies who specialise in overseas clients. I suggest that you look through that section of the forum:
Umbrella Companies - Contractor UK Bulletin Board
You can then decide which ones look reputable (e.g. Clarity) and email/phone them to ask about your specific situation.

+2 for this.

[eek]

+3 - and Clarity does handle overseas customers unlike a lot of their competitors - note there may be an additional charge to reflect bank currency exchange costs.

[jamesbrown]

+3 - and Clarity does handle overseas customers unlike a lot of their competitors - note there may be an additional charge to reflect bank currency exchange costs.

Agree with the others.

However, one potential complication in using an umbrella is the jurisdiction and governing law in the contract. Perhaps Clarity accepts contracts written in other jurisdictions against other governing laws (than England and Wales), but I doubt it, and North American companies are unlikely to write contracts outside of their own jurisdiction and governing law, from experience.

If the umbrella option doesn't work out, and I agree that it's the best option, then you can certainly operate an inside IR35 contract through a company, it just doesn't make much sense unless you have other contracts and/or an umbrella isn't an option.

[jamesbrown]

I'll also add that, although perfectly possible, it's kinda hard for a North American company to exert the necessary control to place a contract inside IR35, although control is only one aspect, so I'd get your contract reviewed for IR35 and commercial terms (at least the former before going further) before making any assumptions.

[lucyclarityumbrella]

However, one potential complication in using an umbrella is the jurisdiction and governing law in the contract. Perhaps Clarity accepts contracts written in other jurisdictions against other governing laws (than England and Wales), but I doubt it, and North American companies are unlikely to write contracts outside of their own jurisdiction and governing law, from experience.

Thanks all! Yep needs to be governed under UK law, otherwise it invalidates insurances, btu most are happy to work off our contract so could be a possibility.