Reply to: IR35 - contractor with Uk Ltd company and clients not in UK

[jamesbrown]

Agree w/ mal. It's less likely that D&C could be a factor, but having an overseas client doesn't reduce the level of due diligence required in any way. You also can't bank on HMRC not pursuing a case because it's more difficult for them to get answers (there are avenues, bilaterally, actually). Best to follow normal procedure and get the contract reviewed and WP aligned. Still, there are far more important commercial issues; don't let the IR35 tail wag the dog. A full commercial legal review is worthwhile, especially for contracts that have overseas jurisdiction and/or governing law.

[malvolio]

I’ve argued this exact point with a UK based client who has US client.

You can define precisely how the work is to be done, what coding standards and languages to use, what procedural conventions to apply within the code, what timescales apply, what rework is necessary to correct errors... There are many ways in which a client can exercise control and direction.

Even in my field, which is high level strategic process design, clients can (if I let them) demand I use ITIL v3 conventions or even adhere to ISO20000-1 standards - and I'm there to tell them what to do not the other way round.

I agree it is not easy for a remote client to do so, but it is not as simple as saying that because they are remote then they cannot impose D&C.

[Andrew@Wisteria]

Presumably if your client is overseas, and you're tax resident in the UK, then virtually all your work is remote? If so, I struggle to see how HMRC could win an IR35 challenge. Is it realistic that a client can control how/when/where a contractor does work when they're in a different country? I would've thought not...but you should check with a specialist like QDOS.

I’ve argued this exact point with a UK based client who has US client.

[Maslins]

Presumably if your client is overseas, and you're tax resident in the UK, then virtually all your work is remote? If so, I struggle to see how HMRC could win an IR35 challenge. Is it realistic that a client can control how/when/where a contractor does work when they're in a different country? I would've thought not...but you should check with a specialist like QDOS.

[jamesbrown]

Goes without saying that the contract has to reflect the working practices. Otherwise not worth the paper it’s written on.

Not without saying, perhaps, given (IR35) case law w/r to sham contract clauses. It does catch people. Especially on substitution.

But I did say I was being pedantic.

[Andrew@Wisteria]

There are no contract clauses that put a contract outside, only working practices.

/pedant

Goes without saying that the contract has to reflect the working practices. Otherwise not worth the paper it’s written on.

[jamesbrown]

What about a contract clause that states that your company will only receive a payment on the realisation of planned benefits in five years' time?

What about a contract clause that states you're the Queen of Ireland?

1.6.9. Prime Contractor and Subcontractor hereby declare that this contract is outside of "IR35". Honest. Promise.

[northernladyuk]

There are no contract clauses that put a contract outside, only working practices.

/pedant

What about a contract clause that states that your company will only receive a payment on the realisation of planned benefits in five years' time?

[jamesbrown]

The devil is in the detail. Any contractor specialist accountant should be able to advise on the types of clauses that should be present in order to put you outside of IR35. If you need full contract review and IR35 insurances then you can pay for this too.

There are no contract clauses that put a contract outside, only working practices.

/pedant

[Andrew@Wisteria]

I will work remotely in the UK for a single customer throughout 2018, it is clear to me that the contract will have to be written correctly.
Basically my doubts concern the type of relationship with my customer since it will be only one throughout the year 2018.

Do you think there can be problems with IR35?

The devil is in the detail. Any contractor specialist accountant should be able to advise on the types of clauses that should be present in order to put you outside of IR35. If you need full contract review and IR35 insurances then you can pay for this too.

[malvolio]

Thanks malvolio.
What are the most important issues I will have to face?

That's why I said to read the guides. You have to understand UK tax laws, not just IR35, what expenses are and aren't allowable, VAT rules and at least the basics of book-keeping, plus oddities like annual reporting and Companies House requirements.

So get reading...

[mudskipper]

Your client being outside the UK does not mean that IR35 is irrelevant. It can, however, make it more difficult for HMRC to prove your IR35 caught status, as non-UK companies are not obliged to answer their questions.

But your best bet is to read up and understand IR35, and make sure your working practices fall outside.

Good luck!

[mmarco]

Sigh....

Start from here.. But remember that IR35 is not the most important issue you will face.

Thanks malvolio.
What are the most important issues I will have to face?

[malvolio]

I will work remotely in the UK for a single customer throughout 2018, it is clear to me that the contract will have to be written correctly.
Basically my doubts concern the type of relationship with my customer since it will be only one throughout the year 2018.

Do you think there can be problems with IR35?

Sigh....

Start from here.. But remember that IR35 is not the most important issue you will face.

[mmarco]

ir35 - business contract

Meaning a genuine business to business agreement

I will work remotely in the UK for a single customer throughout 2018, it is clear to me that the contract will have to be written correctly.
Basically my doubts concern the type of relationship with my customer since it will be only one throughout the year 2018.

Do you think there can be problems with IR35?