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

[loxdevil]

Hello,

I am currently a UK tax payer planning to go back to France to create my own French contracting company soon.
My only client will be the UK company I currently work with.

I will be based in France as well as my contracting company, French Tax payer and invoice this UK company.

From the various threads I have seen, I can see that when I will be working from France, I will not be subject to IR35.

However, my client wants me to come to UK in their office 1 week per month.
1) Will I be subject to IR35 on this week of work ?
I thought I would not as I and my contracting company are based in France but my future client is telling me that I will be subject to IR35 during this week in the UK.


2) If I am subject to IR35, is there a way to reduce this tax from my French taxes ? Do you know how it can be done ?

Thanks a lot for your help,
Best Regards,

[ladymuck]

Does the UK company agree that the work can be completed from France and they're happy to pay invoices (presumably in Euros) to a French company?

Figure that out first before you worry about your IR35 status.

[jamesbrown]

Short answer is, yes, the contract will be subject to IR35 if you're UK resident and you will probably be UK resident under the statutory residence test, but you should confirm that. It's quite hard to lose your tax residency now. Also, you cannot apportion the contract value in the way you think - one week under IR35 and the rest not. It's a binary thing, just like statutory residence (on which IR35 minimally depends, along with a 5% share ownership).

Speak to Sue Abel-Beswick at optimum (formerly of I-Paye).

[loxdevil]

ladymuck yes, the UK company has accepted that, to the condition that I go to their office 1 week per month. We are currently building the contract but I would like to be sure of my IR35 status before signing anything.

jamesbrown, when you say UK resident, what do you mean ?
I am French and was in UK for 3Y, but I decided that I will come back to France in the very near future to create my own company.
Unless I am completely wrong, once I am back in France, I will be back as French Resident and French Tax resident, won't I ?
Does 1 week per month in an hotel in the UK will also make me a UK resident ?

[NotAllThere]

Does 1 week per month in an hotel in the UK will also make me a UK resident ?

A few points to ponder while waiting to speak to an expert.

• Any and all work you do while physically present in the UK is subject to UK tax regardless of whether you are tax resident.
• If you work 5 days a month in the UK, that's 60 days a year. Check out the tax residency rules and see whether you fall foul of them. Since you'll actually be working the Monday and Friday, they'll most likely count as full days.
• If you are tax resident in the UK and France, which is possible, then you will have to fill out a tax return in both countries. You will be taxable on worldwide income in both countries.
• The UK and France have dual taxation agreements, so any tax you pay in one country is offset against the other.
• You need to find out about NI contributions as well.

The only way that your UK trips won't be taxable at all is if you only attend meetings or attend workshops and suchlike. That seems very unlikely in your case. I used to work for a UK client from offshore. But I visited their offices 3-4 days a year.

[jamesbrown]

when you say UK resident, what do you mean ?
I am French and was in UK for 3Y, but I decided that I will come back to France in the very near future to create my own company.
Unless I am completely wrong, once I am back in France, I will be back as French Resident and French Tax resident, won't I ?
Does 1 week per month in an hotel in the UK will also make me a UK resident ?

You can be a tax resident of more than one country at one time. In the UK, it's determined by the Statutory Residence Test, which looks at time spent here working but also ties, so complete it. There are mechanisms to avoid double taxation of the same income, in principle, but that doesn't change your tax residency status. Anyway, I strongly suggest you speak to an expert and I would recommend Sue, as noted above. There are probably more things you don't know right now than things you do know.

[jamesbrown]

Quoting is fubared (or perhaps my use of it). Nick! Anyway, you get the idea.

[NotAllThere]

Quoting is fubared (or perhaps my use of it). Nick! Anyway, you get the idea.

Fixed it for you. it's because there was one of those @ thingies at the start of the quote.

[jamesbrown]

Fixed it for you. it's because there was one of those @ thingies at the start of the quote.

Ah, thanks, so my fault

[NotAllThere]

Ah, thanks, so my fault

Er... no. It should be able to quote references.