IR35 : Working from France but going to UK 1 week per month

[loxdevil]

Thanks a lot for your help guys !
I looked at UK residency criterias and I will not be UK tax resident as I will be in the UK for only 60-72 days a year.

I also had a chat with Sue who told me that I would be off of IR35 only if my trip to the UK are flagged as Business Trip and not contractual (which is very unlikely, like mentionned by NotAllThere ).
It seems one of the best way to avoid IR35 would be to have 2 contracts with my UK company : 1 with my own contracting French company for when I work in France and 1 against an umbrella company in the UK, for my 1 week per month in the UK.

If I do not go by this plan (not sure my current company would love that) I am not yet sure if it is possible for me to pay IR35 taxes from my French company or if I absolutely need a UK legal company. I will also need to check that I am not overtaxed by HMRC for this week (mainly on the fact that jamesbrown mentionned IR35 is a binary choice) as I don't want HMRC to tax me on my full month where I only work for 1 week in UK.

[jamesbrown]

Using a UK umbrella sounds eminently sensible if you are UK tax resident. Again, you do need to be UK tax resident for IR35 to apply and you assert that you will not be. Like IR35 status, that is a matter of fact, not choice, so just make sure you are correct.

Otherwise, I think the IR35 aspects are complicated. In that case, the first thing to establish is where the responsibility lies. For example, if the end client is in the UK and the UK company is not a small company (according to the Companies Act definition) and your PSC is outside the UK and you are a UK tax resident, then the UK end client will be responsible for determining your IR35 status using the Off Payroll Working Rules and deducting taxes at source if they deem the contract to be inside.

If you have a single contract with that UK end client and the contract is inside IR35, they will not legally be able to pay part of your fees as a deemed payment and the rest gross and, overall, you are looking at a complicated mess. That is why an umbrella company would make a lot of sense for the UK work if you can break the work into two separate and distinct parts. If, however, the end client is a small company (and you are UK tax resident), then the responsibility lies with your overseas PSC to apply the rules correctly. Again, for the avoidance of doubt, this only matters if you are UK tax resident.

[NotAllThere]

Using a UK umbrella sounds eminently sensible if you are UK tax resident. Again, you do need to be UK tax resident for IR35 to apply and you assert that you will not be. Like IR35 status, that is a matter of fact, not choice, so just make sure you are correct.

Otherwise, I think the IR35 aspects are complicated. In that case, the first thing to establish is where the responsibility lies. For example, if the end client is in the UK and the UK company is not a small company (according to the Companies Act definition) and your PSC is outside the UK and you are a UK tax resident, then the UK end client will be responsible for determining your IR35 status using the Off Payroll Working Rules and deducting taxes at source if they deem the contract to be inside.

If you have a single contract with that UK end client and the contract is inside IR35, they will not legally be able to pay part of your fees as a deemed payment and the rest gross and, overall, you are looking at a complicated mess. That is why an umbrella company would make a lot of sense for the UK work if you can break the work into two separate and distinct parts. If, however, the end client is a small company (and you are UK tax resident), then the responsibility lies with your overseas PSC to apply the rules correctly. Again, for the avoidance of doubt, this only matters if you are UK tax resident.

AIUI, the principle is - if you perform work in the UK, you are liable to UK tax on the income arising. Tax residency is whether you are liable for tax on worldwide earnings and is a different world of pain.

For example, if the end client is in the UK and the UK company is not a small company (according to the Companies Act definition) and your PSC is outside the UK and you are a UK tax resident, then the UK end client will be responsible for determining your IR35 status using the Off Payroll Working Rules and deducting taxes at source if they deem the contract to be inside.

Is that right or should it be

For example, if the end client is in the UK and the UK company is not a small company (according to the Companies Act definition) and your PSC is outside the UK and you are working in the UK, then the UK end client will be responsible for determining your IR35 status using the Off Payroll Working Rules and deducting taxes at source if they deem the contract to be inside.

?

[jamesbrown]

Liability to tax is one thing. I agree that there is a UK tax liability on substantive work performed in the UK (edit: or, I should say, potentially, because it's possible that no PAYE is due if the contractor obtains a no tax PAYE code). Note that I was careful not to suggest otherwise. Liability to IR35 is another. For example, a UK tax resident with less than a 5% share interest in a UK company is surely still liable to tax on income received from that company, just not IR35.

[jamesbrown]

Ultimately, though, it's out of the OPs hands if the UK company is a large company because they must decide themselves on their responsibilities w/r to IR35 (both if they need to issue an SDS and to then issue it in a timely way and to operate deductions as needed), not the OP.

[jamesbrown]

Btw, for anyone interested, here is the HMRC view on international matters w/r to the Off Payroll Working rules (need to register with an e-mail address):

https://register.gotowebinar.com/register/6657159591576552976

[gisp]

The way I see it:

1. Contract will be inside IR35
2. Paid to you by UK brolly, i.e. all UK tax and NICs deducted.

It is the best thing to just do nothing. Live in France if you want, pay all your taxes in the UK. Submit FR tax return with all income described as world income. Pay the difference in tax in FR (if any).

This might not follow ALL the very complicated rules on double taxation, tax residency etc, however it is a good example of low risk of co.ck ups.

You must have settled status to work in the UK (or UK citizenship) and this might be another problem.