Example Contract within IR35?

Martynt74

Martynt74

Martynt74

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Joined
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Hondon de las Nieves, Spain
Hi All,

My wife needs to switch from being a PAYE employee to a Contractor due to us emigrating to Spain and needed to be self employed in Spain for Tax purposes.

Her company have asked her to come up with a contract, but all the examples i can find are for a typical contractor agreement, however i'm after one that would include the regular benefits of being a contracted employee as they've agreed to just pay a fixed rate and then holidays/sick are included rather than adjusting billing rates.

I'm not sure whether it can be as basic as a regular employment contract but with payment terms to be outside of regular payroll.
 
Bit confused, outside IR35 = contractor, inside IR35 = staff/PAYE.

Is she still working for a U.K. based company?

I would be getting a tax specialist/accountant involved to be honest.

Edit: if she is becoming a Spanish tax payer then IR35 becomes moot I suspect and a contract would need to be mindful of the Spanish tax regime.
 
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Jokester said:
Bit confused, outside IR35 = contractor, inside IR35 = staff/PAYE.

Is she still working for a U.K. based company?

I would be getting a tax specialist/accountant involved to be honest.
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Yes, the agreement is effectively to be an employee with the benefits of receiving a set salary each month rather than adjusting for days worked and covering any sick leave etc. However since she'll be working from Spain she can't be regular staff/PAYE.

The Tax side is all taken care of on the Spain side with our accountant over there, however it's just the wording on the contract i'm trying to pull together, as standard contractor contracts seem to be worded that work won't be provided etc or equipment not provided. Something that she would still want to be the case.

I'm thinking the best thing would be to just re-word the payment section of her Employment Contract to state payment via invoice.
 
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Martynt74 said:
Yes, the agreement is effectively to be an employee with the benefits of receiving a set salary each month rather than adjusting for days worked and covering any sick leave etc. However since she'll be working from Spain she can't be regular staff/PAYE.

The Tax side is all taken care of on the Spain side with our accountant over there, however it's just the wording on the contract i'm trying to pull together, as standard contractor contracts seem to be worded that work won't be provided etc or equipment not provided. Something that she would still want to be the case.

I'm thinking the best thing would be to just re-word the payment section of her Employment Contract to state payment via invoice.
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Yeah, it sounds like you just want a staff contract with the sections about payment, work location and and anything about PAYE/pension removed/updated to reflect the reality of the work circumstances so you would be getting paid gross with the understanding that your partner is paying tax through the Spanish version of Self Assessment.
 
I think you need to get advice from a specialist in Spain; most European countries have their own equivalent of IR35, and just because she will be working for someone in another country doesn't necessarily mean it won't apply.
 
Mr Jack said:
I think you need to get advice from a specialist in Spain; most European countries have their own equivalent of IR35, and just because she will be working for someone in another country doesn't necessarily mean it won't apply.
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Yeah, we have it's fine. She's classed as an "Autonomo" and the same thing in spain is effectively a "False Autonomo", however it only applies to companies within Spain.

I ended up just rewording the main contract template we had to include things like annual leave and for the company to supply equipment, so should be all good :)
 
This sounds like one for the company's legal team to draft up as it's an employment law point, bit odd for them to defer this to you.

However, the company should also be careful they aren't creating a taxable permanent establishment of their UK business in Spain as well by doing this. Less of an issue for your wife though.
 
Martynt74 said:
Hi All,

My wife needs to switch from being a PAYE employee to a Contractor due to us emigrating to Spain and needed to be self employed in Spain for Tax purposes.

Her company have asked her to come up with a contract, but all the examples i can find are for a typical contractor agreement, however i'm after one that would include the regular benefits of being a contracted employee as they've agreed to just pay a fixed rate and then holidays/sick are included rather than adjusting billing rates.

I'm not sure whether it can be as basic as a regular employment contract but with payment terms to be outside of regular payroll.
Click to expand...
Check out the Contractor UK website. Great source of information for swiching to contracting.
 
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