IR35 Ruling

Hi

Apologies if you think this is discussed earlier but I couldn't find a scenario like this . One of my friend is on entrepreneur visa. One of the contracts his company is engaged into provides interpreter services to various places which includes hospitals, police stations, courts, etc. Now the situation is that its such type of a contract where the company asks that if you are free to cover the assignments which are obviously of different timescales at various places. For sure, depending on the availability HE can refuse the assignments as well and this will not affect his contract at all. Now the company has stated that this role falls under IR35 ruling and there is no option to opt-out of it. The contract has nothing to do with the immigration status of the director as he was doing it while the extension application was with HO. He has been doing it for quite a long time now and his extension application (which was approved) also included this contract as well. But as per IR35 ruling now, the assignments will be paid in future after the deduction of tax and NI which wasn't the case earlier as he was doing his own accounts at the end of tax year. Also the company is VAT registered which will still be paid on top of whatever the total amount would be.

What do gurus suggest, should he continue with this contract or terminate it by giving a notice.

Thanks in advance

An IR35 contract 99% of the times is a 'contract of service' where the contractor pretty much works in capacity of an employee (without being directly employed) which is explicitly not allowed under Tier 1E rules. Your friend needs to seek advice from specialised solictors who determine his employment status from the contract terms.

uk-tier-1-entrepreneur-visas/contract-w ... l#p1445105

Hi

Many thanks for your response. I went through the post you referred. and have answered accordingly.

What do you suggest personally in this scenario...

Are YOU personally responsible for the work ? Yes because you are solely present there to interpret.

- Is the contract between YOU and the client rather than your company and the client? Well the contract is between the company and the end client and not with the various places he goes to.

- Does the client care about your immigration status ? NOT AT ALL.

- Can you send some other expert/consultant/employee from your business to do the job in your place or the contract demands YOU to be there? Yes if you think a person going there is good enough to interpret between both parties.

- Does the contract control and mange your time, place of work, time off etc? Well, they ask for availability first and if its feasible then the assignment is given otherwise this can be refused too which will not make any difference. (I guess an employee cannot refuse work)

- Are your duties pretty much very similar to the duties of an employee of such company/client ? N/A in this scenario i guess.

- Is your position simply a vacancy that normally an employee is expected to fill ? I don't think so. I know there are 0 hours contracts as well, but in this contract sometimes you get 3 assignments in a week and at times no assignment in a month.

Also this has been through HO once as he just recently got his extension and this was one of his contracts which was there for all 3 years of t1 initial time period. Obviously he wants to keep his hands clean for settlement.

VWS wrote:Hi

Many thanks for your response. I went through the post you referred. and have answered accordingly.

What do you suggest personally in this scenario...

Are YOU personally responsible for the work ? Yes because you are solely present there to interpret.

- Is the contract between YOU and the client rather than your company and the client? Well the contract is between the company and the end client and not with the various places he goes to.

- Does the client care about your immigration status ? NOT AT ALL.

- Can you send some other expert/consultant/employee from your business to do the job in your place or the contract demands YOU to be there? Yes if you think a person going there is good enough to interpret between both parties.

- Does the contract control and mange your time, place of work, time off etc? Well, they ask for availability first and if its feasible then the assignment is given otherwise this can be refused too which will not make any difference. (I guess an employee cannot refuse work)

- Are your duties pretty much very similar to the duties of an employee of such company/client ? N/A in this scenario i guess.

- Is your position simply a vacancy that normally an employee is expected to fill ? I don't think so. I know there are 0 hours contracts as well, but in this contract sometimes you get 3 assignments in a week and at times no assignment in a month.

Also this has been through HO once as he just recently got his extension and this was one of his contracts which was there for all 3 years of t1 initial time period. Obviously he wants to keep his hands clean for settlement.

This is part of the genuine entrepreneur test, which is not an absolute test. That makes it difficult to have a definitive opinion.

But, from the description, it looks like it is a genuine entrepreneurial activity. And the fact that the extension was approved with the same information gives a good means of challenging any negative decision in the future.

Also, I assume this is not the only activity in the company. There has to be additional employees - what do they do ? If they are also interpreters and any one of them can be sent to the client's place, for example, the case will be stronger.

But, to Zimba's point, better to take professional advice.

marcnath wrote:But, from the description, it looks like it is a genuine entrepreneurial activity. And the fact that the extension was approved with the same information gives a good means of challenging any negative decision in the future.

Also, I assume this is not the only activity in the company. There has to be additional employees - what do they do ? If they are also interpreters and any one of them can be sent to the client's place, for example, the case will be stronger.

Obviously that is not the only activity in the company. There are different contracts as well which are going on at the same time. But not all of the employees are interpreters but at the end of the day, this is not shown that who goes to the assignment (I mean whether its the director or an employee).

So in short if Tax & NI are deducted using IR35 ruling is okay (UNDER THIS SCENARIO ONLY)

**Please dont read this as in general discussion for IR35 ruling as this is different on a case to case basis**

VWS wrote:

marcnath wrote:But, from the description, it looks like it is a genuine entrepreneurial activity. And the fact that the extension was approved with the same information gives a good means of challenging any negative decision in the future.

Also, I assume this is not the only activity in the company. There has to be additional employees - what do they do ? If they are also interpreters and any one of them can be sent to the client's place, for example, the case will be stronger.

Obviously that is not the only activity in the company. There are different contracts as well which are going on at the same time. But not all of the employees are interpreters but at the end of the day, this is not shown that who goes to the assignment (I mean whether its the director or an employee).

It is not about whether it is a director or employee, but about the fact that the assignment is not tied to a person but to a skillset.

VWS wrote:So in short if Tax & NI are deducted using IR35 ruling is okay (UNDER THIS SCENARIO ONLY)

**Please dont read this as in general discussion for IR35 ruling as this is different on a case to case basis**

The guideline says:
"In considering whether your work amounts to genuine self-employment (and is therefore work for the business which you have established, joined or taken over) or is in fact employment
by another business, we will take into consideration your status in tax law and employment law, as well as...."
So, while IR35 status is not a disqualification on its own, it is one of the things they will use to evaluate.

VWS wrote:Hi

Apologies if you think this is discussed earlier but I couldn't find a scenario like this . One of my friend is on entrepreneur visa. One of the contracts his company is engaged into provides interpreter services to various places which includes hospitals, police stations, courts, etc. Now the situation is that its such type of a contract where the company asks that if you are free to cover the assignments which are obviously of different timescales at various places. For sure, depending on the availability HE can refuse the assignments as well and this will not affect his contract at all. Now the company has stated that this role falls under IR35 ruling and there is no option to opt-out of it. The contract has nothing to do with the immigration status of the director as he was doing it while the extension application was with HO. He has been doing it for quite a long time now and his extension application (which was approved) also included this contract as well. But as per IR35 ruling now, the assignments will be paid in future after the deduction of tax and NI which wasn't the case earlier as he was doing his own accounts at the end of tax year. Also the company is VAT registered which will still be paid on top of whatever the total amount would be.

What do gurus suggest, should he continue with this contract or terminate it by giving a notice.

Thanks in advance

Hi Vws,
From April 2017 , you can not work with public sector by using Own Ltd company as government changed the rules. , Either they pay you after the deduction or you can use umbrella company . Both are not allowed under Tier Ent 1 Visa.

Kindly advice you to change the contract , because this does not matter either you come under IR35 or not. If you working with public sector by using own ltd company they always treat as you come uder IR35.

Thanks