IR35...

Hi ..

My question is if you or your company fall under IR35 Rule, does this breach with the conditions of leave to remain under tier 1 entrepreneur , although there is no employee - employer relationship between companies.

IR35 means that the HMRC would lift the veil of incorporation and treat the person being the employee of the business rather being as a contractor. As a result HMRC would place the person in same position as being employee. By this way he [employee] has to pay the same amount [or closer to] tax and NIC that would have been payable he was an employee. There are seperate calculations to calculate the tax and NIC for personal service companies [IR35 COMPANIES].

Answer to your question, No. Tax rules and HO rules are different. If you are working for a person through your limited company then you will be fine.

Regards

hham1224 wrote: Answer to your question, No. Tax rules and HO rules are different. If you are working for a person through your limited company then you will be fine.

Regards

Not necessarily, being inside our outside of IR35 is dependant on the contract terms and how they reflect working practices, specifically RoS, MOO and D&C.

Suggest the OP googles the above terms and gets the contract checked by QDOS or Bauer and Cottrell.

Just checked the information about Tier 1 Entrepreneur on gov.uk website and found :

What you can and can’t do

You can:
set up or take over the running of 1 business or more
work for your business, including being self-employed, but you should check your work meets the conditions of being self-employed
bring family members with you

And from HMRC website:

As a general guide as to whether a worker is an employee or self-employed or (Limited Company - You can not use it hide your status ); if the answer is 'Yes' to all of the following questions, then the worker is probably an employee:

Do they have to do the work themselves?
Can someone tell them at any time what to do, where to carry out the work or when and how to do it?
Can they work a set amount of hours?
Can someone move them from task to task?
Are they paid by the hour, week, or month?
Can they get overtime pay or bonus payment?

I would say IR35 and Immigration rules are strictly interconnected.

Yes I agree that IR35 and HO rules are linked together. Depends on terms of your contract and no of clients or activities you are involved in.

If you fall into IR35 then by default you will fail to meet the entrepreneur conditions.
The simplistic way of looking at it is : is it a stand alone service that I am supplying or is it labour I am providing.

The IR35 consideration points are in the main the same points the HO use, they are not directly referred to but form the basis of the parameters when considering the nature of the supply being made.

Tier 2 contracted staff are measured in the same manner however there is a clear statement within the guidance that allows for intervention against the sponsor.

In considering the tier 1 entrepreneur business at the point of the initial application if the business is essentially providing labour rather than a defined service the application will fail.
If at a later stage when a visa extension or ILR upgrade is applied for HMRC will be contacted to verify your taxable status and declared income. If there is any work / employment income outside of the stated business vehicle then by default you will have breached the conditions of your visa.

Frontier Mole wrote:If you fall into IR35 then by default you will fail to meet the entrepreneur conditions.
The simplistic way of looking at it is : is it a stand alone service that I am supplying or is it labour I am providing.

The IR35 consideration points are in the main the same points the HO use, they are not directly referred to but form the basis of the parameters when considering the nature of the supply being made.

Tier 2 contracted staff are measured in the same manner however there is a clear statement within the guidance that allows for intervention against the sponsor.

In considering the tier 1 entrepreneur business at the point of the initial application if the business is essentially providing labour rather than a defined service the application will fail.
If at a later stage when a visa extension or ILR upgrade is applied for HMRC will be contacted to verify your taxable status and declared income. If there is any work / employment income outside of the stated business vehicle then by default you will have breached the conditions of your visa.

Hello, I have claimed myself inside IR35. But I got my visa last year and the contract was finished before July 2014 when they clarified the condition of being self-employed under Tier 1 Entrepreneur visa. Do you think I will be in trouble? Will it still be a problem if I quickly switch to Tier 2 now?

Thanks,