opt out for non-UK citizens and non-UK companies

[Ulukai]

I am from Belgium, but am working through a UK agency for a Belgian client.

The agency asked me to sign an opt-out notification, which states that the "Conduct Regulations 2003 shall not apply".

I had no idea what this meant.

The agent told me that this just means that they can not ensure certain working conditions for me as if they would need to do for normal employees, such as an ergonomical work environment, guarantees for not too many working hours on one day, etc.

I didn't think much of it at the time, so I signed it.

When I try the search function on this forum however, it seems that this is actually more of a tax thing, I keep reading about some IR35, which I know nothing about at all.

My invoices are without VAT, because I'm invoicing from another country to the UK.

Does this thing even apply to me at all?

I am not a UK citizen, I have a limited company in Belgium, not in the UK. Could I have any consequences from signing this?

[tractor]

...

I am from Belgium, but am working through a UK agency for a Belgian client.

The agency asked me to sign an opt-out notification, which states that the "Conduct Regulations 2003 shall not apply".

I had no idea what this meant.

The agent told me that this just means that they can not ensure certain working conditions for me as if they would need to do for normal employees, such as an ergonomical work environment, guarantees for not too many working hours on one day, etc.

I didn't think much of it at the time, so I signed it.

When I try the search function on this forum however, it seems that this is actually more of a tax thing, I keep reading about some IR35, which I know nothing about at all.

My invoices are without VAT, because I'm invoicing from another country to the UK.

Does this thing even apply to me at all?

I am not a UK citizen, I have a limited company in Belgium, not in the UK. Could I have any consequences from signing this?

Your understanding is very mixed up.

First piece of advice; never take legal advice from an agent. In fact always check your calendar if they tell you what the day is. They tell lies. They typically do not even understand the business they are in and they would sell their mother if they could make a dollar from it.

There are links on the right that you can check for IR35 and Opting out of the Conduct Regulations. There are many posts here, sticky and otherwise for you to read but in a nutshell, NOT opting out of the conduct regulations affords the contractor some protection from agency non - payment and onerous handcuff clauses (I wonder why your agent never mentioned those?)

If you want to read the Regulations a copy is here The link goes straight to the non payment clause but you can navigate to the rest from there.

The main point you need to understand is that there is no case law or precedent linking IR35 (taxation measure) with the Conduct Regulations (yet).

[SueEllen]

I am from Belgium, but am working through a UK agency for a Belgian client.

The agency asked me to sign an opt-out notification, which states that the "Conduct Regulations 2003 shall not apply".

I had no idea what this meant.

The agent told me that this just means that they can not ensure certain working conditions for me as if they would need to do for normal employees, such as an ergonomical work environment, guarantees for not too many working hours on one day, etc.

Nonsense.

Just because you aren't directly employed by the client it doesn't mean they do not have to comply with Belgian law on how they treat workers.

In fact I am aware there is a European Directive that covers Health and Safety at Work.* Some states have laws that are better than the directive i.e. the UK while other states have laws that just cover it.

For example if you were a contractor at a nuclear power plant in Belgium/Germany/UK/whereever and you opted out, would it be legal for the client allow for you to be irradiated?

In your case you need to find out Belgian law which an internet search would probably reveal and work out which category you fall into.

*I actually googled and found the link here

[sal]

If you are working in Belgium, for a Belgian client and you are Belgian, then IR35 doesn't concern you. So there is no potential tax implication from you signing the opt out.

Not sure if the opt out even applies in your case it's a tough question to answer, but there are no consequences from signing it other than what Tractor already listed, like no protection from non-payment and some other restrictive clauses that might be in your contract.

Long story - short, chill, it's nothing to lose your sleep over.

[Ulukai]

Thank you all for clarifying.
I think I have a sufficient understanding of this now and have no problem with having signed out of the opt out of conduct regulations 2003.

[BlasterBates]

I would double check the rules on VAT, as you are in Belgium providing services to a Belgian client. I would have thought you pay VAT on this. It's a tricky one as you are invoicing a UK agency, but this doesn't necessarily stop you being liable for VAT.

[Ulukai]

About the VAT thing,

Yeah, it's a complex matter indeed and I think that not many people, in either of both countries, will be able to give an entirely closing answer on this one...

The agency has told me to invoice without VAT.

My accountant has also told me that, since I am invoicing to a UK company, and it is the UK company that pays me the money, I shouldn't include VAT on the invoice, but I have to mark it as "reverse charge supply".

So I'm not too worried about this.

However, I have also found other sources that state that this is a gray zone.

I can only think of one practical solution to avoid this international tax confusion:
- client pays agency's share directly to agency
- I invoice client directly
- Client pays me directly

Sounds simple enough to me
Don't think this is ever going to happen though.

[Taita]

If you are working in Belgium, for a Belgian client and you are Belgian, then IR35 doesn't concern you. So there is no potential tax implication from you signing the opt out.

Not sure if the opt out even applies in your case it's a tough question to answer, but there are no consequences from signing it other than what Tractor already listed, like no protection from non-payment and some other restrictive clauses that might be in your contract.

Long story - short, chill, it's nothing to lose your sleep over.

Yeah. But your contract with a UK agent is governed by UK law. However, If you are a Belgian citizen living and working and being paid in Belgium you are not subject to UK tax laws regardless of your employer or intermediary's status.

[TheFaQQer]

Could I have any consequences from signing this?

If the contract specifies which country has legal jurisdiction in the event of a dispute, and there is a dispute, and you need any of the protection that remaining inside the regulations, then you may find that you have waived those away.

For example, if the agency doesn't get paid by the client and you still want paying, then your task is much harder if you are outside the regulations than inside. If you want to return to the client in a shorter time frame than the contract allows, and you have waived that right away, then you may regret doing that.

Nothing to do with IR35, but there are protections that you may want / need that (assuming the opt out was done correctly) you no longer have.

[Taita]

If the contract specifies which country has legal jurisdiction in the event of a dispute, and there is a dispute, and you need any of the protection that remaining inside the regulations, then you may find that you have waived those away.

For example, if the agency doesn't get paid by the client and you still want paying, then your task is much harder if you are outside the regulations than inside. If you want to return to the client in a shorter time frame than the contract allows, and you have waived that right away, then you may regret doing that.

Nothing to do with IR35, but there are protections that you may want / need that (assuming the opt out was done correctly) you no longer have.

The Agency cannot instigate an opt out of the regulations if they are dealing with a UK based worker but if they can with a foreign contractor assigned to a foreign client why bother to mention/roll out regulation paperwork?