advice for working for UK company from abroad

[ramjetnospam]

Hi there,

I'm an Australian whose been a UK resident and working for a UK company for the last 4 years. I'm about to move to South Africa for around 9 months in Sept (before travelling back to Australia) and I'm going to keep working for my current company for about 6-9 of them. I don't intend to return to the UK anytime soon.

My company was going to keep me on as a permanent employee but their insurance company can't maintain the current insurance agreements so my company has told me I will need to be self-employed/contractor. They spoke to inland revenue and IR said this was possible.

I work in IT and broadband in South Africa is ridiculously expensive (~£100-£200 a month) so I'm wondering what I should set myself up as (self-employed, work through umbrella company, or setup ltd company) in order to gain the best tax advantages. I was just going to rejoin my previous umbrella company to avoid the hassle. Does anyone have any experience with this and/or could make any suggestions about which route to take?

[TykeMerc]

I would assume that it's the South African tax regime you need to understand rather than the UK one for this issue.

I'd find an SA accountant if I was you and get their advice, especially since you will be leaving the UK for good.

[Brussels Slumdog]

Self employment SA

Hi there,

I'm an Australian whose been a UK resident and working for a UK company for the last 4 years. I'm about to move to South Africa for around 9 months in Sept (before travelling back to Australia) and I'm going to keep working for my current company for about 6-9 of them. I don't intend to return to the UK anytime soon.

My company was going to keep me on as a permanent employee but their insurance company can't maintain the current insurance agreements so my company has told me I will need to be self-employed/contractor. They spoke to inland revenue and IR said this was possible.

I work in IT and broadband in South Africa is ridiculously expensive (~£100-£200 a month) so I'm wondering what I should set myself up as (self-employed, work through umbrella company, or setup ltd company) in order to gain the best tax advantages. I was just going to rejoin my previous umbrella company to avoid the hassle. Does anyone have any experience with this and/or could make any suggestions about which route to take?

I have not worked in SA since 80's.
There was a concept of Close Corporation which was used by professionals in order to invoice clients.
There is also the concept of PTY Ltd Private company but requires more capital
Self employed in SA or in the 3rd world is someone working in the informal sector. Like washing cars or selling bananas door to door or in the street.

[TriggerHippy]

Ask them about you working as an "Independent Contractor" for them and if they can tax you accordingly. I think it is tax code 3622 that they should use.

[oracleslave]

AFAIK the best way to do this in SA would be the Closed Corporation route as suggested earlier in this thread. Pretty similar to contracting though a Ltd Co I think, just less regulatory/auditing type requirements than a Ltd co.

[TriggerHippy]

Is it worth setting up a Closed Corporation for a total of 9 months?

[xchaotic]

Personally, I would simply still send them invoices through the exisitng UK Ltd, which I presume you use now.
I suppose you could claim 6 months worth of SA broadband, but not more nad itwould still be cheaper overall than setting up a new entitity in SA, I would think.

[saigon triumph]

Working for UK Company

I had a similar situation. i worked for a UK company getting paid from the UK company while working in the Netherlands. In the netherlands they have a rule that if you are less than half a year in the netherlands and paid from a foreign country you are not a part of their tax jurisdiction. Since my contract was split over the end of financial year i was under 6 months for both years even though i worked there for 9 months.
I was not liable for UK tax as i was not a tax resident there (not living there). So i basically used Mitsulimited.co.uk which allowed me to remain self employed. The agency had no problem paying them and technically i wasn't in any tax jusrisdiction.

You may want to check to see if a similar rule applies in SA. Otherwise this may give you a chance of going self employed.

Iknow these 183 day rules apply in a lot of countries. Check it our for SA.

[Funkywood]

I've worked for a UK client through a UK umbrella while in Australia for just under 6 months after working the first few months in London.

That put me as non resident for tax purposes, although the rules mention staying in one place for those 6 months to be classed as resident and as I was moving around from Melbourne to Sydney.

You'll have to see what the deal in SAfrica is.