Foreign (EC) contractor working in UK

[Asgeir]

Hi all.

I'm an IT contractor in Iceland and am looking into taking contracts in the UK. My question is if I need to start a UK limited company to do so or if I can use my Icelandic company? In Iceland I don't have to pay VAT of services sold to foreign countries. Don't I have to collect and pay VAT in the UK (this is of course irrelevant if I have to have an UK limited)?

Any other advice you can give is appreciated

Ásgeir

[anthony]

Hi all.

Don't I have to collect and pay VAT in the UK (this is of course irrelevant if I have to have an UK limited)?

Any other advice you can give is appreciated

Ásgeir

You only have to charge VAT on services if you are VAT registered - but with regards to your situation - i can only say - get specalist advise....

[Batcher]

It's very unlikely you would get any contracts unless you had a UK company to work through.

[Eirikur]

Not sure why you are concerned about VAT, you charge it and you pass it on, clients have also no concerns as they do the same. All rates are quoted excluding VAT.
Unless you have some very specific sought after skills It will be very hard to find a contract if you do not have a UK based contact address and Ltd company.

[TheFaQQer]

Not sure why you are concerned about VAT, you charge it and you pass it on, clients have also no concerns as they do the same. All rates are quoted excluding VAT.

Unless the client isn't VAT registered or is exempt from VAT.

In which case you need to make sure that everyone is talking the same price.

[BlasterBates]

Yes you need to start a UK Ltd company, or go through an Umbrella or register your Icelandic company in the UK, which is not worth doing, i.e. start a UK company or register with a UK based umbrella.

If you are working at UK based clients you need to tax it on the UK even if you are there for less than 6 months in the year. If you are in the UK less than 6 months you only tax UK income, not Icelandic income and obviously it will be taxed at the lower tax rate.

There are exceptions, such as if you are working for an Icelandic company and you are sent to the UK for a while, but I doubt very much whether that is the case. Obviously in that case you wouldn't be billing a UK agency.

[pmasoft]

Yes you need to start a UK Ltd company, or go through an Umbrella or register your Icelandic company in the UK, which is not worth doing, i.e. start a UK company or register with a UK based umbrella.

If you are working at UK based clients you need to tax it on the UK even if you are there for less than 6 months in the year. If you are in the UK less than 6 months you only tax UK income, not Icelandic income and obviously it will be taxed at the lower tax rate.

There are exceptions, such as if you are working for an Icelandic company and you are sent to the UK for a while, but I doubt very much whether that is the case. Obviously in that case you wouldn't be billing a UK agency.

Why wouldn't an Icelandic contractor company look for work in the UK? UK contractors via their UK companies look for work abroad all the time.

[BlasterBates]

Why wouldn't an Icelandic contractor company look for work in the UK? UK contractors via their UK companies look for work abroad all the time.

Of course he can use his icelandic company but you would have to register it and by the time you've gone through the process you might as well start up a UK company.

You can't just go and do business in a foreign country and not register, though I know there are UK contractors that do and get into hot water.

[Batcher]

Why wouldn't an Icelandic contractor company look for work in the UK? UK contractors via their UK companies look for work abroad all the time.

I believe The Netherlands and Belgium, amongst others, insist you can't work through your UK Ltd over there. You must start up a local company or work through an umbrella.

I've worked in Luxembourg through my Ltd but it was a short contract and the agency was in Belgium. I was paid (eventually) in Euros.

[pmasoft]

I believe The Netherlands and Belgium, amongst others, insist you can't work through your UK Ltd over there. You must start up a local company or work through an umbrella.

I've worked in Luxembourg through my Ltd but it was a short contract and the agency was in Belgium. I was paid (eventually) in Euros.

Think you missed the point I was making re foreign companies working in the UK. I am sure that some countries have hoops to jump through but that does not stop one from looking as was implied in the previous post which I was commenting on.

UK agencies are a point in case as they refuse to work with overseas companies in most instancies, but suspect that is more them trying to cover their rears then any legal requirement.