The short answer: An offshore accountant is not automatically an independent contractor. Start by identifying the contracting parties, the legal employer and how the work is actually performed. A person employed by a staffing provider is a different arrangement from a freelancer you engage directly. Classification, payroll and employment-rights questions depend on the facts and relevant jurisdictions. Get those responsibilities established before the person starts.
A firm wants a dedicated person: someone who follows its processes, joins its meetings and works with its team. A quote then describes the person as a contractor. Before discussing the fee, clarify what that word means in the proposed arrangement.
It may refer to your contract with a supplier, the individual’s status, or simply a loose description of external support. Those meanings are not interchangeable. This guide sets out the questions to take into the arrangement review; it does not determine the legal status of a particular hire.
Separate the supplier contract from the person’s status
Your firm may have a service agreement with a staffing company while the individual has an employment contract with that company or another identified employing entity. Paying a supplier invoice does not tell you whether the individual is self-employed.
Equally, a recruitment introduction does not mean the recruiter takes responsibility for employment. A provider might introduce a freelancer whom you then engage directly. Ask for the actual contracting chain, not just the label used for the service.
| Arrangement | What to establish |
|---|---|
| Direct employee | Your firm’s employing obligations in the relevant location and the practical payroll arrangement |
| Direct independent contractor | Whether the actual engagement supports self-employed status, plus tax and reporting responsibilities |
| Person employed by a staffing provider | Named employer, employment responsibilities and the boundaries of your firm’s management |
| Outsourced accounting service | Who controls delivery, which outputs are contracted and how work and exceptions are reviewed |
The right choice depends on the work and the operating relationship you need. Our dedicated staff versus outsourcing guide covers that choice more fully.
Why working practices matter
Classification systems look at the relationship in substance. Factors to establish include who directs the work, whether personal service is required, the individual’s independence, the commercial risk they bear and how the relationship continues. The relevant tests and weight given to different factors vary.
A full-time schedule, use of your systems or attendance at meetings should prompt questions about the arrangement. No single feature is a universal test, and changing one sentence in a contract is not a reliable way to resolve an unsuitable model.
Consider an illustrative engagement, not an Around People case: a firm directly engages an individual indefinitely, controls their daily work and expects personal availability throughout its office day. The firm should assess the relationship before describing the person as independently self-employed. An invoice alone does not complete that assessment.
Ireland: use the employment-status framework
Revenue’s guidance distinguishes employment from self-employed contracting and directs businesses to the five-step framework following the Karshan judgment for tax-status assessment. A “contract for services” label should not replace that assessment.
For a cross-border engagement, establish where the individual works, which entity engages or employs them and the relevant tax and employment-law requirements. Do not assume that an Irish firm’s normal domestic contractor process answers every overseas question. The employment arrangement in the person’s working country also needs to be understood.
UK: distinguish status questions from IR35
The UK employment-status guide explains that tax status and employment-law status can differ. Calling somebody a contractor does not establish that they have no employee or worker rights.
HMRC’s off-payroll guidance concerns workers supplying services through their own intermediary, such as a company. Client responsibilities depend on the applicable rules, including client size and sector. This is a specific framework, not a universal rule for every overseas staffing arrangement.
“Deemed employer” is a tax responsibility within that framework. It should not be treated as shorthand for every situation where an individual might have employment rights. Ask which rules apply to the actual chain and why. HMRC also cautions against relabelling a labour-supply arrangement as an outsourced service to avoid the rules.
A supplier based abroad does not, on its own, establish the answer. Confirm the worker’s circumstances, employing arrangement, UK connections and relevant tax position with an adviser familiar with that setup.
US: classification and cross-border tax are separate questions
The IRS federal tax guidance considers behavioural control, financial control and the type of relationship together. There is no single deciding factor. It also explains that working remotely does not by itself establish contractor status.
That classification question is separate from where income is sourced. The IRS personal-service income guidance generally looks to where services are performed. Citizenship, residence, the employing entity, work location and applicable law still need assessment; do not assume that a foreign contractor should simply follow a domestic US paperwork process.
Federal tax guidance also does not answer every employment-law question. Identify the jurisdictions and obligations relevant to the actual arrangement before selecting documents or promising a particular tax result.
What to ask a staffing provider
- Which legal entity employs the individual, and in which country?
- Who handles salary, required deductions, leave and employment benefits?
- What can our firm direct, and which employment decisions go through the provider?
- Who handles performance concerns, disciplinary steps and termination?
- What responsibilities remain with our firm, and how are they stated in the agreement?
- What changes if the person’s location, schedule or role changes?
A provider should be able to explain its model and give you the relevant agreement. Keep the distinction between assigning accounting work and making employment decisions clear to your managers. If the practical arrangement changes, review the allocation again.
How this relates to Around People’s offer
Around People’s offer is a dedicated person working as part of your team, with recruitment, employment, equipment, payroll and ongoing support managed by Around People. You interview and select the person, and the accounting work takes place in your systems and to your agreed standards.
Before agreeing the placement, establish the specific employing entity and responsibilities in the contract. The service description is not a promise that every classification or cross-border obligation disappears. Your firm still needs clear supervision, review, data access and professional approval arrangements.
The offshoring checklist brings these questions together with working hours, cost and access. Use it to prepare the discussion rather than treating employment status as a question to raise after work has started.
Plan the role before choosing the person
Bring the responsibility you want the person to own and the questions you have about employment and day-to-day management. We can explain the proposed staffing arrangement before you choose a candidate.
Staffing for Irish and UK practices, staffing for US firms, or book a role-planning call.
Frequently asked questions
Is an offshore accountant automatically a contractor?
No. The individual could be employed directly, employed by a provider or genuinely self-employed. Establish the actual arrangement and applicable status rules.
Does paying an invoice prevent employment risk?
No. Invoicing is one feature of the arrangement. Classification depends on the relevant rules and actual relationship, not the payment description alone.
Does IR35 apply to every offshore hire?
No. It concerns particular intermediary arrangements and depends on the applicable UK rules and circumstances. Check the actual contracting chain and tax position rather than relying on the person’s overseas location.
Can we manage a person employed by a staffing provider?
Day-to-day work direction can be part of the model. Agree the boundary between assigning and reviewing accounting work and employment decisions handled by the named employer. Put the allocation in the placement agreement.
