If my Personal Service Company is registered in
the UK and I supply my services to a client who is non-UK resident (and
has no branch or agency in the UK) will I be caught by the IR35 legislation
if the terms of the engagement relate to an employment?
The deemed payment is treated as a payment chargeable as employment income.
The tax treatment of this payment will therefore depend not on the residence
status of the client but on the residence status of the worker and the location
in which the duties of the contract are carried out.
If you are resident and ordinarily resident in the UK for tax purposes,
then the deemed payment will be taxable in the UK, regardless of where the
duties are carried out. If you are resident but not ordinarily resident
you are taxable in the UK on all emoluments (deemed payments) arising from
duties performed in the UK and on remittances to the UK of payments arising
in respect of overseas duties.
Further information about the residence rules can be obtained from HMRC
booklet IR20. This booklet describes the residence rules and how to work
out whether or not you are resident in the UK for tax purposes. Copies are
available from Tax Enquiry Centres and Tax Offices.
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