European client; UK agency don't know what they're doing re IR35

[PocketCalculator]

My Ltd company has a European client. Clearly they aren't affected by IR35 reform.

Agency in the middle are a UK company. My understanding is that it will be down to them to create a SDS, and take the risk if they get that wrong.

They know literally nothing about this and suggest I just "carry on as before" as "IR35 doesn't apply" because the client is abroad.

If they are content to ignore their obligation to do this, and are therefore surely shouldering the risk, shall I just continue blindly on? (This obviously ignores the possibility that I'm waving a white flag above my head and shouting "investigate me" regarding the time already spent on contract.)

[eek]

Does the European client have any UK presence?

Is that UK presence of a size that it meets the large or medium company rules?

Unless the answers to both questions are yes, the agency is right and you can carry on as before.

[PocketCalculator]

Well they are "Asset Management Europe" and there is an "Asset Management UK". They are adamant that they are a completely different legal entity however, and have stated: "I can confirm that Asset Management Europe does not have to apply IR35 rules. There providing (me) is not providing advice to Asset Management UK and /or Asset Management UK aren't paying (me) then he will be Out of Scope from an IR35 perspective."

But I thought the agency ends up on the hook in this situation and has to issue the SDS?

[eek]

Well they are "Asset Management Europe" and there is an "Asset Management UK". They are adamant that they are a completely different legal entity however, and have stated: "I can confirm that Asset Management Europe does not have to apply IR35 rules. There providing (me) is not providing advice to Asset Management UK and /or Asset Management UK aren't paying (me) then he will be Out of Scope from an IR35 perspective."

But I thought the agency ends up on the hook in this situation and has to issue the SDS?

If the agency doesn't issue an SDS it's their issue and not yours.

Edit to add - from the Agency IR35 workshop an agency can formally ask the client to confirm their size

[Paralytic]

Does your contract with the agency have any indemnity against you for any future tax liabilities that fall onto the agency? Whether it is enforceable is a different question, but if there is (and its fairy common for these to be inserted now), it might be why the agency have given the response they have.

[jamesbrown]

Does your contract with the agency have any indemnity against you for any future tax liabilities that fall onto the agency? Whether it is enforceable is a different question, but if there is (and its fairy common for these to be inserted now), it might be why the agency have given the response they have.

They probably do, but if they're relying on that..... good luck

OP: the test is that anyone in the supply chain above the PSC has a UK connection and is not a small company. The agency would meet this test and is, therefore, the Fee Payer and responsible for issuing an SDS, so you are correct. The responsibility and liability is theirs. Nevertheless, a belt-and-braces approach would make sense, i.e., get the contract and working practices reviewed yourself and assume the responsibility and liability is yours (BAU), even though it probably isn't.

[PocketCalculator]

There's no agency indemnity nonsense in my contract. I never use standard agency contracts, I get them drawn up by Roger Sinclair at www.egos.co.uk.

[jamesbrown]

There's no agency indemnity nonsense in my contract. I never use standard agency contracts, I get them drawn up by Roger Sinclair at www.egos.co.uk.

Sounds like you're good then. I mean, you were anyway . Would still recommend a belt-and-braces approach, assuming the liability is on YourCo, even though it isn't with a UK agency in the chain.

[MPwannadecentincome]

There is a HMRC webinar on this topic... see here particularly on the part where it explains a bit about what a "connected company" is in regards to the UK and EU legal entities. It is on this page https://www.gov.uk/guidance/help-and...ayroll-working

Scroll down until you see this text:

Watch a catch up webinar about off-payroll working rules from April 2021: international matters

The link there actually goes to https://register.gotowebinar.com/rec...53524795663622

HTH