Do I have to use UK ltd/umbrella to get paid nowadays?

[mrv]

Hi,

Just had a chat with an agent about possible contract, and mentioned I'd like to use my Ltd registered in another EU country. Agent told me they can only pay money to UK-based Ltds/umbrellas, mumbling something incoherent about compliances etc. Is this a legal requirement, agency's attempt to minimise some risks, avoid extra work or what?

[LisaContractorUmbrella]

They will probably be referring to the Offshore Intermediaries Legislation which was not designed to prevent the use of EU Ltd's operating in the UK but paying money to an offshore company would raise a red flag to the compliance team.

[mrv]

So should I understand getting paid to a regular, normal, usual Ltd, registered in EU country that has nothing to do with tax evasion or money laundering schemes should be totally fine and acceptible?

[LisaContractorUmbrella]

Not necessarily - the agency are trying to protect themselves from potential future liability; recent legislation changes mean that an agency engaging with an offshore company could be liable for any unpaid taxes. Even though your company may be a perfectly legitimate trading entity, agencies are unlikely to engage with it - the potential risks to them in the future are just too high.

As a matter of interest are you tax resident in the UK? I would assume, if you have an EU registered company, you have either been working overseas or are tax resident overseas?

[mrv]

I'm tax resident in both UK and overseas. Spent quite a while working in UK using umbrella solution, now opened my own ltd in my home country hoping to use it. I'm not the biggest expert in UK tax, still my understanding is that if UK agency gets involved with EU ltd, there should be no taxes involved, as ltd only sends agency an invoice and that's it? UK agency surely cannot be bothered how and if my EU ltd is paying taxes, as it all happens in my own country?

Also, when you say "offshore", do you mean offshore zones like Cyprus, Bahamas etc, or just simply "outside the UK"?

[Scruff]

I've never come across a UK Agency who will engage and pay a non UK based Limited Company for work performed in the UK.

Good luck with your scheme.

[LisaContractorUmbrella]

I'm tax resident in both UK and overseas. Spent quite a while working in UK using umbrella solution, now opened my own ltd in my home country hoping to use it. I'm not the biggest expert in UK tax, still my understanding is that if UK agency gets involved with EU ltd, there should be no taxes involved, as ltd only sends agency an invoice and that's it? UK agency surely cannot be bothered how and if my EU ltd is paying taxes, as it all happens in my own country?

Also, when you say "offshore", do you mean offshore zones like Cyprus, Bahamas etc, or just simply "outside the UK"?

Offshore in terms of the legislation I referred to just means anywhere outside the UK although, typically, the schemes HMRC were cracking down on were in tax havens such as Isle of Man. The agency will certainly care about your tax situation if there is any risk at all that they could be held liable for your tax debt. I honestly can't see that you will persuade a UK agency to pay a non-UK company gross - sorry

[mrv]

Damn, I find this whole ordeal unnnecessarily difficult. I'm a citizen and resident of an EU country, I'm tax resident in my country and UK, never hide any taxes whatsoever. I just have no plans on staying and/or living in UK for prolonged periods of time, my trips seem to be got contract - came over - work done - back home type of things, and I certainly do not want to get involved with HMRC and other UK institutions I would have to get involved with if I had a UK based Ltd. I want to use my offshore Ltd just for simplicity, so I didn't have any loose ends afterwards. Every time I tried asking my agent about this I got something like bla bla maybe compliance? bla bla don't know bla bla not possible bla I really know nothing bla bla response. Well, I guess it's time to raise stakes with my agent - my way or the highway, will let you know how it goes ))

[LisaContractorUmbrella]

Damn, I find this whole ordeal unnnecessarily difficult. I'm a citizen and resident of an EU country, I'm tax resident in my country and UK, never hide any taxes whatsoever. I just have no plans on staying and/or living in UK for prolonged periods of time, my trips seem to be got contract - came over - work done - back home type of things, and I certainly do not want to get involved with HMRC and other UK institutions I would have to get involved with if I had a UK based Ltd. I want to use my offshore Ltd just for simplicity, so I didn't have any loose ends afterwards. Every time I tried asking my agent about this I got something like bla bla maybe compliance? bla bla don't know bla bla not possible bla I really know nothing bla bla response. Well, I guess it's time to raise stakes with my agent - my way or the highway, will let you know how it goes ))

I think you'll find it will be the highway but good luck

[TheFaQQer]

Well, I guess it's time to raise stakes with my agent - my way or the highway, will let you know how it goes ))

At the end of the day, if the agency will not deal with an offshore company (for whatever reason, or for no reason at all), then you have the choice to either work via a method they will accept or walk away and find someone who will let you use the invoicing vehicle of your choice.

If you aren't prepared to walk away, then there is obviously a limit of how far to try this line - you'd look pretty silly if you threatened to walk and then were forced into a humiliating climb-down, and it would weaken your position somewhat in any other discussions you might have with the agency.