Reply to: IR35 and remote working

[NotAllThere]

If the contract is one of employment, then my understanding is that you have to treat it as an IR35 contract and account for ernic, if the contract is with a non-UK based company with no presence in the UK.

Nope it will depend on the size of the UK branch and whether the branch is very small or meets the large/ medium company criteria

There you go. I've edited the post to make the point clearer.

[Whitelime]

Thanks for the help and advice everyone.

The next steps are very clear (and in a matter of a few hours you've probably saved me a month of back-and-forth with my accountant!)

Much appreciated, Whitelime.

[jamesbrown]

Where has that document appeared from it’s dated 2017 and seems awfully out of date

What has changed about deemed employment payments when operated by the worker's intermediary (this is not a rhetorical question)? Nothing that I recall. It's all in section 54 of Chapter 8 of Part 2 of the ITEPA.

https://www.legislation.gov.uk/ukpga...rt/2/chapter/8

[eek]

https://www.gov.uk/guidance/how-to-c...oyment-payment

Yes, OP could use an umbrella - would certainly cut a lot of the hassle. They won't get the 5% expenses allowance, though.

Where has that document appeared from it’s dated 2017 and seems awfully out of date

[jamesbrown]

If it the contract is inside use an Umbrella - deemed payments don't mention pensions at all

https://www.gov.uk/guidance/how-to-c...oyment-payment

Yes, OP could use an umbrella - would certainly cut a lot of the hassle. They won't get the 5% expenses allowance, though.

[eek]

It depends what the professional review of your contract and working practices says. If it says that your contract is inside, then you'll need to operate a deemed payment. If it doesn't, then it's business as usual.

If it the contract is inside use an Umbrella - deemed payments don't mention pensions at all

[jamesbrown]

Thanks again James,

So assuming the risk is in fact with MyCO, maximum pension contributions and then full PAYE on the rest would be the most-palatable safe option?

Whitelime.

It depends what the professional review of your contract and working practices says. If it says that your contract is inside, then you'll need to operate a deemed payment. If it doesn't, then it's business as usual.

[Whitelime]

Thanks again James,

Whitelime.

[jamesbrown]

Hi All,

Apologies - I am replying, but it seems all my posts need to be approved by a Mod. Not sure which order they'll be displayed in once they are approved



Hi James,

Thanks for your reply. As mentioned in a previous (yet to be approved) post, the UK branch of the end client has far more than 50 employees, so I don't believe it's small.

I'm quite sure a contract review would determine outside IR35, but a working practices review would probably be inside IR35. If I'm understanding correctly, this means all the risk would be with the end client? What a predicament.... alienating this particular end client if things went south wouldn't be a good move in my niche area....

Whitelime.

It's the working practices that matter.

Yes, the risk would be with the UK connection, which carries the liability. The overseas client would be responsible for the SDS.

The maximum you could do would be to try and make the end client aware of the risks. If they don't ignore you outright (quite likely), they will probably use that knowledge to adopt a risk averse posture and issue an SDS that indicates the working practices to be inside, so it's a double-edged sword.

As things stand, the supply chain above you is non-compliant and the UK connection is exposed to a significant risk that they probably know nothing about (but then, that's part of the purpose of the reform - to have the supply chain police itself).

You are also now aware of their probable non-compliance and you have a choice to make about what to do next. If they fail to listen or issue an SDS, just make sure you take a belt and braces approach and assume the risk is with YourCo (probably not a bad idea anyway, given the complexity).

[Whitelime]

Hi James,

Thanks for your reply.

Whitelime.

[jamesbrown]

To correct one misunderstanding, IR35 always applies insofar as some person/company needs to consider it. Whether the responsibility and liability belongs to YourCo (ITEPA chapter 8) or a company above you in the supply chain (ITEPA chapter 10) depends on the nature of the supply chain.

As eek suggests, since your supply chain is not fully overseas, whether there is a responsibility and liability above YourCo will depend on whether the UK connection is small (Companies Act definition). Good luck getting a response from your supply chain about that

Belt and braces. Assume the responsibility and liability belongs to YourCo and get your contract reviewed as normal (as before April 6 2021). If it doesn't belong to YourCo, it won't be your fault, and the supply chain above you will, er, regret it.

[Whitelime]

..

[eek]

If the contract is one of employment, then my understanding is that you have to treat it as an IR35 contract and account for ernic, if the contract is with a non-UK based company

Nope it will depend on the size of the UK branch and whether the branch is very small or meets the large/ medium company criteria

[Whitelime]

..

[NotAllThere]

If the contract is one of employment, then my understanding is that you have to treat it as an IR35 contract and account for ernic, if the contract is with a non-UK based company with no presence in the UK.