IR35 status through SAP

[UKfrelancer]

Hi,

I have been offered a contract through an recruitment agency for the provision of Remote IT services through 'SAP South Africa' to an end client in South Africa. Because the agency deems the client to be "wholly oversees" the declaration of IR35 status has been passed to my limited company.

The end client itself is wholly oversees. However, the contract is between my UK Limited Company and SAP South Africa, not the end client. Therefore would this be classed as inside IR35 because SAP has a presence in the UK?

Is my only way to work outside of IR35, to ask SAP to provide the 'Status Determination Statement' from their UK presence?

Thanks

[WTFH]

Is the contract with you and SAP or with you and the agency?
What happened to your role in NL?

[Patrick@Intouch]

If SAP South Africa has a UK presence and that is the company that you will be working for then it is for them to provide the status determination.

That doesn't necessarily mean that the role will be inside IR35 and the status will not be determined by who your client is (that is to say that the role could be inside IR35 whether you do the determination or the determination is done by your client). The person/entity doing the determination will still be assessing the same engagement with the same contract and working practices.

It's important that reasonable care is taken in assessing whether the role is outside IR35 or not and it's likely you'll need to engage with a specialist who understands IR35 to make sure that you get this right.

[UKfrelancer]

Hi,

Thanks for your reply. The contract has been drafted by the agency.

There's a section in the contract detailing the self billing procedure is between my limited company and the agency. However, the body of of the contract stipulates the Client as SAP South Africa.

Thanks for asking about the NL contract. This is still an option but also seeking advice on IR35. There was an acquisition of this NL company in 2019 and the company that made the acquisition does have a presence in the UK. Therefore, does this make the client responsible for the IR35 declaration. Or can these two companies be treated as separate entities in the eyes of HMRC?

The NL company is seeking further advice, but any feedback would be appreciated.

[UKfrelancer]

If SAP South Africa has a UK presence and that is the company that you will be working for then it is for them to provide the status determination.

That doesn't necessarily mean that the role will be inside IR35 and the status will not be determined by who your client is (that is to say that the role could be inside IR35 whether you do the determination or the determination is done by your client). The person/entity doing the determination will still be assessing the same engagement with the same contract and working practices.

It's important that reasonable care is taken in assessing whether the role is outside IR35 or not and it's likely you'll need to engage with a specialist who understands IR35 to make sure that you get this right.

Thank you for your reply.

SAP as a company is global and has a presence in many countries around the world. There is a SAP UK. I guess this is a separate company to SAP South Africa, but both must be part of the SAP group. Therefore I suspect it does mean that SAP South Africa does have a UK presence through SAP UK? Is that how it would be viewed by HMRC?

[Patrick@Intouch]

Thank you for your reply.

SAP as a company is global and has a presence in many countries around the world. There is a SAP UK. I guess this is a separate company to SAP South Africa, but both must be part of the SAP group. Therefore I suspect it does mean that SAP South Africa does have a UK presence through SAP UK? Is that how it would be viewed by HMRC?

If a company has a group undertaking, subsidiaries, or even an office in the UK then it is considered to have a presence in the UK.

[eek]

If a company has a group undertaking, subsidiaries, or even an office in the UK then it is considered to have a presence in the UK.

This - we've seen multiple instances in the past where an utterly random 3rd party has responsibility for the assessment. Probably best for the agent to get SAP South Africa to speak to HR department of SAP UK and get a generic outside IR35 because this project has nowt to do with us determination...

[UKfrelancer]

This - we've seen multiple instances in the past where an utterly random 3rd party has responsibility for the assessment. Probably best for the agent to get SAP South Africa to speak to HR department of SAP UK and get a generic outside IR35 because this project has nowt to do with us determination...

Thank you. That is where my concern was. I will hold off signing anything for this role until this is confirmed.

[UKfrelancer]

Is the contract with you and SAP or with you and the agency?
What happened to your role in NL?

Hi,

After looking more at the contract. The Client is specified as 'SAP South Africa', the Company to which the contract is with is 'The Recruiter' and the Consultancy is 'My Ltd Co.'

However, there is a final end client that is "wholly remote" and has no UK presence. So the chain is Consultant(me) > My limited Company > The Recruiter > SAP South Africa > Final end client in South Africa.

So on this basis, am I responsible for the IR35 determination as per what I have been informed from the recruitment agency? Or is there some requirement along the supply chain for some other party to supply an SDS?

Thanks

[jamesbrown]

If SAP is part of a group (yes, AFAIK) and the group has a UK branch or PE (yes, AFAIK), then the overseas client is responsible for issuing the SDS and the UK branch is liable for any debt incurred (notwithstanding any contractual liabilities pushed to YourCo).