British freelancers abroad still haunted by IR35

By Katherine Steiner-Dicks Last updated Jul 5, 2022

UK freelancers and consuktants who move abroad are still haunted by IR35/Photo by Andrea Piacquadio

READER LETTER

In recent years highly skilled contractors have made the move abroad for a better way of life, Brexit or simply for personal reasons. Following the move, many believe it means the ability to attain freelance projects outside IR35. For some, the move has proved successful when hunting for work, especially with UK companies. For others, the experience has been confusing and stifling thanks to third-party companies, who are still forcing them into “pseudo employee” roles, writes a Freelance Informer reader.

Some UK recruitment agencies are forcing freelancers outside of the UK to become pseudo employees/ Photo by Sora Shimazaki via Pexels

“I work in the Finance Transformation space and moved to Italy just before Brexit. I am a contractor with over 20 years of experience and also a British citizen. I am presently a resident and tax resident in Italy, covered by the EU-UK Withdrawal Agreement.

“What I have found quite shocking is the lack of understanding with the third parties (e.g., recruitment agencies) who tend to manage most searches for vacancies in the Finance Transformation space – and I have heard some real nonsense such as:

You have to bill via a UK Ltd company
They only want to take on British residents (even though the work is largely remote)
As the role is determined as inside IR35, we are happy to put you forward but you would have to be inside of IR35 if offered the role.
You have to have a PSC in your country of residence to bill (the PSC is a UK concept).”

The reader, who wished to remain anonymous, said that they think most of this confusion has been driven by the “client’s risk-averse nature to IR35 courtesy of HMRC but also HMRC’s push for assessing roles in isolation of the contractor and encouraging a default within IR35 assessment.”

Certainly, when talking to agencies, they seem to have a mindset that contractors are all pseudo employees whereas those of us who work from a different tax residency, bill via an invoice and have professional insurances in place, our transaction is business to business even if we are not billing via a PSC.

“I have only two agencies who will continue to put me forward as an outside of IR35 candidate and I think that’s because the CEOs of these agencies have themselves been or are, residents outside of the UK whilst being British citizens.”

The reader told The FI that they will be sending a previously published FI article to recruitment agencies in the future should one reach out with a new opportunity.