Does IR35 Apply to a Filipino Virtual Assistant? (UK Guide, 2026)
The short answer
For a professional who lives in the Philippines and does all of their work there, IR35 does not apply to your engagement. The off-payroll working rules are concerned with people who would be your employee if you looked past the intermediary — and they bite where the work is performed in the UK, or where the worker is UK tax resident. Someone working from Cebu is neither.
That is the general position and it is why the arrangement is simpler than most UK companies expect. It is not a substitute for your accountant confirming it against your facts, and there are edge cases below that genuinely matter.
What IR35 is actually for
IR35, and the off-payroll working rules that replaced the practical burden of it, exist to stop someone leaving a job on Friday and coming back on Monday doing the same work through their own limited company, paying less tax for identical work. It targets disguised employment inside the UK tax system.
The rules turn on two questions: is the worker UK tax resident, and are the duties performed in the UK. A remote professional in the Philippines fails both tests. There is no UK employment to disguise, no UK employment taxes at stake, and nothing for the off-payroll rules to reallocate.
What this means for your PAYE and National Insurance
No PAYE. No employer National Insurance. No workplace pension auto-enrolment. None of these attach to a person who is not employed in the UK and is not performing duties here.
What you have instead is a supplier who invoices you monthly. You pay the invoice and book it as a business expense in the ordinary way.
This is the practical reason the model works for smaller UK companies. Employer NI alone adds a meaningful percentage to the cost of a UK employee before you have paid anyone anything. It simply is not part of this arrangement.
The edge cases that do matter
Three situations change the analysis, and it is worth knowing them rather than discovering them.
If they come to the UK to work. Duties physically performed in the UK are UK duties. A short visit is one thing; someone spending substantial working time in the UK is another, and at that point you need advice before it happens rather than after. Everything on PH Talents is remote-from-the-Philippines by design, so this only arises if you deliberately arrange it.
If they become UK tax resident. Residence is decided by the Statutory Residence Test, which counts days and ties. Someone who relocates to the UK is in a different regime entirely.
If the relationship stops looking like a supplier relationship. This is the one that creeps up on people. IR35 is not the only risk in engaging an overseas contractor — there are separate questions about whether a long, exclusive, tightly-controlled relationship creates issues under Philippine law, where the tests for employment are their own. If over two years you are dictating exact hours, forbidding other clients and treating someone as staff, the substance has changed even though the paperwork has not.
What good practice looks like
Engage under a contract for services, not a contract of service, and make sure the document says what the relationship actually is. Agree a scope and an output rather than dictating hour-by-hour method. Let them keep other clients. Have them invoice you. Keep the invoices.
Every engagement introduced through PH Talents is structured as a contract for services from the start, and we keep the paperwork consistent with it. Reviewing once a year that the relationship still looks the way it did on day one costs ten minutes and is the single most useful thing you can do.
Why this is simpler than an EOR
An Employer of Record employs the person on your behalf in their country, which solves genuine problems if you want an employment relationship abroad — local benefits, local termination protection, local payroll — and charges a monthly fee per head for it.
If what you actually want is a skilled professional invoicing you monthly for services, an EOR is machinery you are paying for and not using. The contractor route has less to go wrong precisely because there is less of it. Where an EOR earns its fee is when you need employment specifically, or when the working relationship genuinely has to be employment-shaped.
The honest summary
A Filipino professional working remotely for your UK company sits outside IR35, outside PAYE and outside employer NI, because none of those regimes reach a non-resident performing duties abroad. Structure it as a genuine contract for services, keep it looking like one, and have your accountant confirm the treatment once at the start. That is the whole of it.
Frequently asked questions
Does IR35 apply to a virtual assistant based in the Philippines?
Generally no. The off-payroll working rules apply where the worker is UK tax resident or the duties are performed in the UK. A professional living and working in the Philippines is neither, so there are no UK employment taxes for the rules to reallocate. Confirm the position with your accountant for your own facts.
Do I pay employer National Insurance for an overseas contractor?
No. Employer NI attaches to UK employment. An independent professional working abroad and invoicing you for services is a supplier, not an employee, so there is no employer NI, no PAYE and no pension auto-enrolment.
Do I need to run PAYE for a Filipino contractor?
No. You pay their invoice and record it as a business expense. They handle their own tax in the Philippines through the BIR. There is no UK payroll registration involved.
What if my contractor visits the UK?
Duties physically performed in the UK are UK duties and change the analysis. A brief visit is different from someone spending substantial working time here. If you are planning anything beyond a short trip, take advice before it happens rather than afterwards.
Could HMRC decide my contractor is really an employee?
The bigger practical risk is that the relationship drifts. If you end up dictating exact hours, forbidding other clients and treating someone as staff, the substance has changed even though the contract has not - and employment tests in the Philippines are their own separate question. Review annually that the arrangement still looks the way it did on day one.
Is a contractor arrangement simpler than using an Employer of Record?
For most small UK companies, yes. An EOR employs the person on your behalf in their country and charges a monthly fee per head for machinery you may not need. If what you want is a skilled professional invoicing you monthly, the contractor route has less to go wrong. An EOR earns its fee when you genuinely need an employment relationship abroad.