B2B permanent job?!

[b0redom]

Hi Folks,
I've just been approached about a permie gig for a HK based company. They have no UK staff at all, and the pimp said that I would get paid via a B2B invoice. Sounds like an Outside IR35 contract right? Then the pimp said, "Obviously you'd get all the permie benefits like holiday, pension, private healthcare, bonus."

Has anyone ever seen anything like this before? TBH the salary is good enough that I could just take it as an outside gig that I invoice the same amount to monthly, but I'm not sure what benefit implications there are for tax etc?

Anyone come across anything like this before?

TIA

b0redom

[northernladuk]

What are they doing about a contract? Will it be a contract of employment but just payments will be gross to you?

If you are employed by them wouldn't options be deemed payments through LTD or PAYE provider such as a brolly? You are employed so it can't be outside can it?

[NotAllThere]

I've seen these kind of contracts turning up more often.

My employer, based in Switzerland, has similar contracts with people in another country. Essentially, they get €x per month, that has provision for ernic, pension, and allows for 25 days paid holiday a year. What they do is invoice each month. In December they invoice for the bonus.

Your HK "employer" can do the same. Maybe there are international pension schemes and health insurance.

But - get the details. The pimp is most likely clueless.

[Bluenose]

b0redom

Yes, as the B2B invoice would be raised by the PAYE umbrella and paid in GBP by the HK based firm.

[northernladuk]

Yes, as the B2B invoice would be raised by the PAYE umbrella and paid in GBP by the HK based firm.

No not outside IR35 then.

[b0redom]

Sounds like maybe I need to wait and see what the contract says, IF it comes to anything.

I'm still not sure on the IR35 thing as there's no UK entity. I might just push for a B2B thing, ask for a bit more money in lieu of holiday and pensions and bill monthly like NAT is suggesting.

[jamesbrown]

I'm still not sure on the IR35 thing as there's no UK entity.

If you are UK tax resident and performing work in the UK, then you are chargeable to UK tax, which means that you are subject to all UK tax legislation, which means that IR35 is pertinent.

If there is no UK entity in the supply chain, then Chapter 8 of IR35 applies, which means that YourCo is responsible and liable, in the first instance.

Given the description you provide, it would be very hard to justify this work as being outside IR35, even with a high degree of control. So, if you were to work through your company, it would probably be inside IR35 and you would probably need to make deemed direct payments. YMMV. Certainly, get a professional contract review when you receive it, but you will need to agree and accurately describe your intended working practices, especially given all that employee fluff, which you won't be able to hide under investigation.

The sensible thing to do here would probably be to work it through an umbrella. However, there are some other options.

Note that, if the notional employer has no UK presence, then there is no ErNI to pay. So, for example, you could arrange a PAYE Direct scheme (DPNI) to organise PAYE yourself, in which case you would paye EeNI plus PAYE taxes. You could also treat this as self-employed income and declare it through your SATR, which would be slightly more favourable from a tax POV than a DPNI scheme. That carries some personal risk, though. I wouldn't work with a North American company this way. Unsure about HK.

[Stevep42]

I've seen something like this a few times, and it’s a bit of a grey area. The whole B2B thing does sound like it’s outside IR35, but offering "permie" benefits complicates things. You might get caught in a situation where HMRC sees you as more of an employee than a contractor, which could have tax implications.

[Bluenose]

No not outside IR35 then.

There's a nice niche doing these type of PAYE gigs from a low income tax EU location.

[willendure]

Yes, as the B2B invoice would be raised by the PAYE umbrella and paid in GBP by the HK based firm.

Seems clear enough to me. You are working through an umbrella. The umbrella has a B2B relationship with the hong kong company. You are PAYE employee of the umbrella.

Why do foriegn companies elect to go this route? Why not B2B direct with a contractor Ltd? They would have no liability for unpaid taxes should the contractor ltd fall foul of HMRC. Just seems to me like it would be simpler and cheaper to cut out the middle man. I bet there must be a reason, hopefully someone will explain.