The UK Government have recently released the results of their review into the off-payroll working rules, commonly referred to as IR35. The review covers various findings however there was one clarification that will be of particular interest to our typically globally mobile industry.
The international complexities with IR35 have long been debated, with the legislation itself being particularly difficult to read and interpret. As a result, how IR35 would apply to international supply chains has been unclear.
In the review, the Government has confirmed that the legislation will be amended so that IR35 will not apply to non-UK companies with no UK presence. This is a promising development from HMRC and should ease the administrative burden for our non-UK clients greatly.
There are still some unknowns with this for example how tax treaties and mariner rules interact with the legislation, and what constitutes ‘wholly overseas’? Presumably working in the UK long enough for a company to create a permanent establishment in the UK will trigger IR35 obligations but what about work in the UK below the triggering threshold?