With many UK based contractors and companies having registered offices in foreign countries, the government changes which come into effect from the 6th of April have been highly anticipated.
However, over the last couple of months there has been significant confusion for international companies and contractors, as their Non-UK clients are unaware of the reforms and the IR35 regulations.
This has caused concerns with clients working practices, who in turn should be responsible for status determination.
Last week, HMRC confirm the results of their review:
‘During the review concerns were raised about how the rules will apply where the client is overseas. The Government has listened to those concerns and will amend the legislation to exclude wholly overseas organisations with no UK presence from having to consider the off-payroll working rules. This means the existing rules for engagements outside the public sector will continue to apply to engagements where the client is wholly overseas, and the individual’s limited company will continue to determine the status of the individual’.
From this we can see that where the client is abroad, the determination of employment status will continue to be made by the Limited company and not by the client or the recruitment business.