Q: “I have a contract, renewed each year for the last 3 years, directly with a French-based company. My contract and working practices are reviewed each year with regards to IR35 status and each time they fall outside the legislation. How does a contract with a company based overseas impact IR35 status? And how will IR35 reform affect this, if at all?”
A: If you’re a UK taxpayer performing services here in the UK, it sounds as if you are already taking the right steps to ensure your IR35 compliance – something we advise you to continue doing in order to safeguard your status even when reform is introduced next April.
However, if you’re a UK taxpayer who works overseas with clients that are also based off-shore, the rules are frustratingly unclear. The draft legislation doesn’t specifically identify which party will become responsible for determining status and who will pick up the liability when the contract is direct, which it is in your case.
HMRC might shed more light on this in the final legislation – and we will be stressing to them the importance of doing so. But until then, we advise you to work off the basis that the responsibility will fall back to you, the contractor, given that the UK tax office has no jurisdiction overseas.
This answer was provided by IR35 specialist, Qdos Contractor.