Ask an expert: IR35/PE risks when engaging contractors overseas

Penny Simmons

I am the tax director of UK technology company with some overseas operations. Our workforce largely consists of UK employees. We engage contractors for specialised short-term projects. Historically we only engaged UK contractors. Following the IR35 changes we avoid engaging with contractors through personal service companies. Owing to a combination of IR35 Brexit and covid-19 we are increasingly struggling to find suitable UK tax resident contractors. Consequently we are considering engaging non-UK tax resident contractors through personal service companies to undertake this work overseas. Does this create an IR35 risk and are there any other UK tax risks to consider?

Given the current widespread shortages across the UK labour market engaging overseas contractors to provide services remotely is becoming an increasingly attractive option. This can resolve IR35 (and resourcing) issues; however the company may become exposed to overseas tax risks particularly in...

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