Working in the UK from Germany

[pyates210]

I jumped ship last year and moved to the fatherland for a nice comfy permi job with a large Japanese corporation. Having had a bit of a monetary culture shock I'm thinking of contracting in UK again but staying domicile in Germany. So, the questions are:

1. Can umbrellas pay into a German account?
2. which is the best umbrella?
3. if I stay ordinarily resident and domicile in Germany (and resident in UK) will I pay tax in Germany, UK or both?
4. Can I claim for accommodation in UK if I fly home to Germany at the weekends?
5. Can I claim flights to and from Germany as expenses?

Thanks in advance for any informed replies...

[BlasterBates]

You'll be taxable in both countries. The general principle is...you're taxed in the same place you do the work, and you need to declare that to the authorities where you live but you won't be taxed again unless you are paid in dividends, which are taxed twice but tax already paid is credited to the tax bill. Corporate and direct income from services isn't, so nay profits will only be taxed once. If you only work for a short while in the UK you can tax it Germany, but once you have worked there for 6 months then you tax it in the UK. If your intention is to be there longer than 6 months, tax from the start in the UK, remembering your dividends will be taxed in the UK and then again in Germany. Income as an employee of a UK company is only taxed once.

[tim123]

I jumped ship last year and moved to the fatherland for a nice comfy permi job with a large Japanese corporation. Having had a bit of a monetary culture shock I'm thinking of contracting in UK again but staying domicile in Germany.

You misunderstand domicile.

Your Domicile is not the last country that you have moved to. It is your country of birth and can only be changed if you severe entirely your links to that county (obviously you can still go there for occasional holidays).

So if you were born in the UK and you are working in the UK, your domicile is the UK wherever it is you are actually residing.

tim

[pyates210]

You misunderstand domicile.

Your Domicile is not the last country that you have moved to. It is your country of birth and can only be changed if you severe entirely your links to that county (obviously you can still go there for occasional holidays).

So if you were born in the UK and you are working in the UK, your domicile is the UK wherever it is you are actually residing.

tim

This is incorrect.... Domicile is a complex legal area and depends on a variety of factors, only one of which is your origin (Domicile of Origin)

In my case I have resided previously for a number of years in Germany and have a German wife. I have no parents alive who live in UK and no Dependant's in UK. I also do not intend to return to UK to live. I would be argued that therefore I could be regarded as domicile in Germany.

[pyates210]

You'll be taxable in both countries. The general principle is...you're taxed in the same place you do the work, and you need to declare that to the authorities where you live but you won't be taxed again unless you are paid in dividends, which are taxed twice but tax already paid is credited to the tax bill. Corporate and direct income from services isn't, so nay profits will only be taxed once. If you only work for a short while in the UK you can tax it Germany, but once you have worked there for 6 months then you tax it in the UK. If your intention is to be there longer than 6 months, tax from the start in the UK, remembering your dividends will be taxed in the UK and then again in Germany. Income as an employee of a UK company is only taxed once.

Thanks, dividend is not an issue as I intend to work for an umbrella inside IR35.

[tim123]

This is incorrect....

It was a simplification yes, but it wasn't incorrect

Domicile is a complex legal area and depends on a variety of factors, only one of which is your origin (Domicile of Origin)

Agreed, That's not inconsistent with what I said.

In my case I have resided previously for a number of years in Germany and have a German wife. I have no parents alive who live in UK and no Dependant's in UK. I also do not intend to return to UK to live. I would be argued that therefore I could be regarded as domicile in Germany.

You might be able to argue that. The revenue would argue that the fact that you still do business requiring your presence in the UK means that you are still UK domiciled (assuming that is your domicile of birth). The case law on the issue points in the favour of the revenue.

The domicile of you wife is irreverent to the argument, the "taking the domicile of your spouse " rule was abolished many years ago.


tim

[BlasterBates]

Domicile is not an issue here as you'll be tax resident in both countries. Domicile is only for foreigners in Britain who don't have to declare foreign income, but since German income is mostly exempt from tax anyway due to the DTA, this is also effectively irrelevant.

[NotAllThere]

I did a 10 week stint for a UK company a few years ago. ( B2B ). My Swiss company billed them, they paid (eventually ). Tax was probably due somewhere in the UK, but the rules are insanely complicated - even more so outside of the EU, so I didn't bother engaging with HMRC, and just paid the normal amount in CH.

I'm quite conscientious about paying the tax that's due. But if I need an international tax lawyer to work it out - forget it. ( That's one of the consequences of an overly complicated tax system - people can't be bothered to engage, and so just don't declare ).

[BlasterBates]

I did a 10 week stint for a UK company a few years ago. ( B2B ). My Swiss company billed them, they paid (eventually ). Tax was probably due somewhere in the UK, but the rules are insanely complicated - even more so outside of the EU, so I didn't bother engaging with HMRC, and just paid the normal amount in CH.

I'm quite conscientious about paying the tax that's due. But if I need an international tax lawyer to work it out - forget it. ( That's one of the consequences of an overly complicated tax system - people can't be bothered to engage, and so just don't declare ).

no for 10 weeks is fine, you only pay tax if your company has a "pemanent" presence in the UK, i.e. you have an employee there, who's tax resident.

[NotAllThere]

I hope so.