T1E status and working on IR35 contracting services

[spikky]

Hello all,

I have a query. I received my Tier 1 extension in March this year. My business is into content/media publishing under my limited company.

My original background though is in IT content development and now am receiving opportunities for IT training/elearning content development with good day rates.

My company's SIC code includes 'Other publishing activities' so planning to venture into all sorts of content development including /IT/Academic writing/Medical writing etc apart from my existing creative media and content.

I am aware of the whole inside and outside IR35 contracting practices and always try to negotiate opportunities for being outside IR35.

My question though is - Is IT contracting outside IR35 permitted under Tier 1 Ent visa.?
As the practices of contract and work is what determines if a contract is inside IR35 or outside and this is a bit of a grey area, in the event of being found inside IR35, is that again a violation of Tier 1 E?

Any advise will be much appreciated.

Thanks.

Spikky

[marcnath]

While IR 35 status is a good indication of whether a contract violates the T1E conditions, it is not something that is specified in the immigration rules.
In all probability (but not necessarily) an IR 35 contract will be considered outside of T1E conditions, but many others not classified as IR35 could also be considered violations.
Pg 59 of the Guidance has a pretty comprehensive set of criteria that will be used to evaluate.

[zimba]

IR35 contracts are generally akin to being 'employed' and viewed as such by HMRC, so they should be avoided

uk-tier-1-entrepreneur-visas/contract-w ... l#p1445105

[spikky]

Yes thought so as well. Sorry I didn't word it properly though I meant IR35 as legislation and contracts falling inside or outside of it. Just to confirm if the contract is IR35 compliant as in outside of IR35 with 1. Control 2. Substitution and 3 MOO (as some contract roles lately clearly indicate inside or outside IR35) and other aspects in working practices that establishes non-employment, then that contract or role should be ok right? or is it still a violation of T1 E?

[marcnath]

Yes thought so as well. Sorry I didn't word it properly though I meant IR35 as legislation and contracts falling inside or outside of it. Just to confirm if the contract is IR35 compliant as in outside of IR35 with 1. Control 2. Substitution and 3 MOO (as some contract roles lately clearly indicate inside or outside IR35) and other aspects in working practices that establishes non-employment, then that contract or role should be ok right? or is it still a violation of T1 E?

To repeat, you CANNOT use IR35 classification to determine whether it is a violation of T1E conditions.
Contracts outside IR35, irrespective of how clearly they are stated, do not automatically mean they are within T1E conditions.
Use the questions on Pg 59 of the guidance to make the judgement.
But, in general, the fact that you are even having this doubt would, in my opinion, call this into question.
It should generally be very clear.

[zimba]

Yes thought so as well. Sorry I didn't word it properly though I meant IR35 as legislation and contracts falling inside or outside of it. Just to confirm if the contract is IR35 compliant as in outside of IR35 with 1. Control 2. Substitution and 3 MOO (as some contract roles lately clearly indicate inside or outside IR35) and other aspects in working practices that establishes non-employment, then that contract or role should be ok right? or is it still a violation of T1 E?

Technically the issue is your employment status. This is determined by the law and Tier 1E rules simply restrict you from working in ANY capacity that classify you as an 'employee'. So if any work done by you (contractual or not) is viewed by HMRC as 'employment' then you are violating Tier 1E rules as well. So a contract that falls within IR35 rules in most cases is a classified as a form of employment and therefore it is safe to say against the Tier 1E rules

Read: https://www.gov.uk/employment-status

[marcnath]

Yes thought so as well. Sorry I didn't word it properly though I meant IR35 as legislation and contracts falling inside or outside of it. Just to confirm if the contract is IR35 compliant as in outside of IR35 with 1. Control 2. Substitution and 3 MOO (as some contract roles lately clearly indicate inside or outside IR35) and other aspects in working practices that establishes non-employment, then that contract or role should be ok right? or is it still a violation of T1 E?

Technically the issue is your employment status. This is determined by the law and Tier 1E rules simply restrict you from working in ANY capacity that classify you as an 'employee'. So if any work done by you (contractual or not) is viewed by HMRC as 'employment' then you are violating Tier 1E rules as well. So a contract that falls within IR35 rules in most cases is a classified as a form of employment and therefore it is safe to say against the Tier 1E rules

Read: https://www.gov.uk/employment-status

OPs question is slightly different. It appears that the contracts have been clearly identified as being outside IR35 but is asking if that is a sufficient condition to ensure non violation of T1E rules.

[zimba]

Sure but I was clarifying the IR35 in general. It is up to HMRC to decide whether a contract falls within IR35 rules or not during a potential investigation. Some people have been caught even when their contract said it is not within IR35 (it is the terms of a contract in their totality that determine that).
As advised in the Tier 1E guide, HO might do this as well to establish the employment status of a Tier 1E migrant.
I provided the link above to look for red flags in a contract to ensure avoiding the IR35 territory