Living and Working in Sweden, invoicing UK Agency can I use offshore umbrella?

[nutz]

Hi All

Have been offered a 3 month contract here in Sweden where I have been a tax resident for a couple of years. The end client is a Swedish Company who has a software vendor supply them resources. The software vendors EMEA resourcing dept will subcontract me/my company through a UK agency who will pay either my Swedish LTD company or an offshore umbrella solution.

I do not have the details of the umbrella yet but apparently they can return around 90% of my rate to me.
It does sound attractive but I think If I chose to go that route I wouldn't want to bring the money earned back into Sweden as it might be hard to explain where that money came from.

As the work is all taking place outside of the UK, and I am no longer a UK resident, would HMRC have any claim on the money I make?

Also if I go via the Swedish LTD route, would I zero rate the VAT on the invoices that I send to the UK? Even thought the work is actually done in Sweden?

[Fred Bloggs]

So, you've been a tax resident in Sweden for 2 years, you want to carry on living and working in Sweden, but you do not want to pay any taxes in Sweden? You're going to be lucky pulling that one off legally.

[nutz]

I don't think the offshore brolly is a long term solution. If used it would probably just be for the first 3 months to build up a bit of cash. During that time I would set up a swedish ltd company and might even pay myself a small salary (which I would pay tax on) to cover my living expenses.

If the contract then gets extended I will switch over to use the Swedish ltd and pay all taxes that I have to here in sweden. I think the offshore brolly earnings would have to stay offshore.

If all of the offshore money stays offshore, is there any way that they can find it? For example, can the swedish tax authorities investigate the UK agency or the offshore umbrella scheme?

Also, just because I invoice a UK agency doesn't make me liable for UK corp tax or VAT does it?

[SueEllen]

To answer your question - While the intermediary company is in the UK and the end client is in Sweden, as you are physically living and working in Sweden and a resident of Sweden that's where you pay tax.