Does IR35 apply to non-UK companies?

IR35 - the off-payroll working rules - is one of the most misunderstood areas of UK tax, especially when there's a cross-border element. This is general guidance, not advice on a specific arrangement, but it should help frame the question.

What IR35 is actually about

At its core, IR35 asks a simple question: if you stripped away the intermediary (typically a personal service company), would the worker look like an employee of the client? If yes, the engagement is “inside” IR35 and should be taxed broadly like employment.

The overseas question

Where the end client is based matters. Broadly, the responsibility for assessing status and operating the rules sits with the UK-based party in the chain. When the end client is wholly overseas with no UK presence, the obligation to make a status determination may not fall on them in the same way - which can shift responsibility back to the worker's own company.

That is not the same as “IR35 doesn't apply”. It changes who is responsible, not necessarily whether the underlying rules are relevant.

Where it gets complicated

• A UK branch or fixed presence of an overseas client can bring obligations back into scope.
• Agencies and other intermediaries in the chain can change who is responsible.
• Company size tests determine whether the client or the worker makes the determination.

The practical takeaway

Cross-border contracting is exactly the situation where assumptions get expensive. The safe move is to document the working arrangement clearly and get the status assessed properly for the specific facts.

Our team can help with the personal and corporate side of this through our personal tax and corporation tax services - and point you to specialist status advice where a determination is needed.