commonly used to describe the UK Tax
regulation which was introduced on 6th of April 2000 and is the British intermediary legislation .
Its gets its name from a press
release issued by HMRC on the 23rd of September 1999 which was
numbered “ IR35’’ and you need to be
aware of it , if you deal with employment agencies in the United Kingdom.
IR35 introduced the concept of “ deemed
employment” for the independent contractor, their employment agency and the end client.
The type of
contract, which the contractor agrees to enter will often determine the type of
structure that they can use. Even before
IR35 was introduced in the UK , the relationships between the agency
worker and the employment agency and the end client still followed basic
employee –employer “contract of service ‘
contractor –agency contract is a “contract for services ‘
cases a contract issued by an employment agency to a limited company is a “contract
Contractors entering in to contractors using a
UK based limited company , can find themselves within the scope of IR35 even if
the location and client where their duties are performed outside the United
Another common misconception is that the (183
day rule) allows a contractor to work overseas for six months and still use
their existing UK structure.
vary greatly on what they allow most European countries will not interpret matters it in the same way as the United Kingdom. For a UK contractor
working overseas the requirements can be very different.
example, In the Netherlands it is
perfectly legal for the end client as the “economic employer” ,to withhold a percentage of the invoiced amount
from the agency if they are not satisfied that Taxes are being paid and this is a vert important in consideration
to be taken into account before you
accept a Dutch contract.
In order to
contract in Holland you need to use a compliant Dutch solution from day
one. In this instance Chesterfield
becomes your employer and takes care of issues like Social security , Income
Tax Insurance and more.
just some of the consideration to be
taken into account before you take up a an overseas contract.