Dutch tax or UK tax??

[Yesshhh]

Hey guys,

Long time lurker, in need of your expertise!!

I have some work for a new client in the Netherlands, and I have no clue about the tax situation.

I will be doing the work in the UK from home, but the company is Dutch. And looking at the contract it will be IR35 caught.

So am wondering if it's best to either:

1. UK LTD
2. UK Personal tax
3. Dutch umbrella/payroll company

If I use my UK LTD I will need to pay employers & employees NI and the income tax.

If I go personally I don't have to pay employers NI I guess?

If I go the dutch umbrella route, will I need to use the double taxation agreement? How does that break down? Does double taxation include National Insurance amount or is it just on the Income tax amount??

Any companies who might have experience of this? My accountant doesn't seem to have much experience.

Cheers

[NotAllThere]

You are working in the UK so that is where you should be taxed.
Are you working through an agency or direct? Where is the agency based? The simple fact of the company you're contracted to being outside the UK may mean that IR35 doesn't apply.

If I use my UK LTD I will need to pay employers & employees NI and the income tax.
Yes. But you may not be IR35 caught.

If I go personally I don't have to pay employers NI I guess?
Probably not (I am not an international tax/ni expert), but you'll also not be behind the limited liability of your company.

I work remotely in Switzerland for a company in the UK. I pay no tax in the UK whatsoever.

[TheFaQQer]

If I use my UK LTD I will need to pay employers & employees NI and the income tax.

Yes, if you are inside IR35. However, I'd be interested to know what makes you sure that you are inside.

If I go personally I don't have to pay employers NI I guess?

Assuming you mean self-employed, then I don't think so. However, you need to find out whether this is even an option or not. If you are going through an agency, then I'd be surprised if they accept this; I'd be even more surprised if a client would.

If I go the dutch umbrella route, will I need to use the double taxation agreement? How does that break down? Does double taxation include National Insurance amount or is it just on the Income tax amount??

No idea. But since the work that you are doing is in the UK, then the UK is where you pay the tax. Nothing to do with the Dutch.

You could also use a UK umbrella, if that's something you are interested in.

Since you have a UK Ltd, though, I'd be using that if it was me.

[Meera @ K&B Accountancy]

Umbrella Vs Ltd

Hi there,

As you are based in the UK, your tax liability lies in the UK.

A UK limited company would generally be a suitable option if your contract is longer than 6 months and outside of IR35. You can operate through a limited company even if you are inside of IR35, however 95 % of your income is taxed as if it was PAYE, and in this case an umbrella company may be a more flexible option for you. Your pay rate and length of contract are what you need to take into consideration when deciding on a viable trading vehicle.

Hope that helps

)

[BlasterBates]

You should be taxed in the UK. See if you can adjust the contract, to get yourself out of IR35. The fact that you work from your own office is a strong pointer. It will be difficult for HMRC to contact the Dutch company so they´ll have to rely mainly on your contract.

[Andrew@Wisteria]

Hey guys,

Long time lurker, in need of your expertise!!

I have some work for a new client in the Netherlands, and I have no clue about the tax situation.

I will be doing the work in the UK from home, but the company is Dutch. And looking at the contract it will be IR35 caught.

So am wondering if it's best to either:

1. UK LTD
2. UK Personal tax
3. Dutch umbrella/payroll company

If I use my UK LTD I will need to pay employers & employees NI and the income tax.

If I go personally I don't have to pay employers NI I guess?

If I go the dutch umbrella route, will I need to use the double taxation agreement? How does that break down? Does double taxation include National Insurance amount or is it just on the Income tax amount??

Any companies who might have experience of this? My accountant doesn't seem to have much experience.

Cheers

Couple of tax planning points to add to other comments - no point registering for VAT flat rate scheme (whether self employed or ltd) as you won't be able to charge VAT to dutch company. So you will miss out on that surplus.

Even if within IR35 - which does not seem certain - You can still claim other direct costs (e.g. travel, pension, PII etc) so you would get a deduction from them if you went ltd.

[jamesbrown]

You should be taxed in the UK. See if you can adjust the contract, to get yourself out of IR35. The fact that you work from your own office is a strong pointer. It will be difficult for HMRC to contact the Dutch company so they´ll have to rely mainly on your contract.

Yes, this. You should definitely look into having the contract reviewed, firstly, and then adjusted if necessary. Working entirely from home is a good start in terms of D&C, which is one important aspect of IR35, but you'll need to have a compliant contract for the reasons stated above. To be clear, though, IR35 does not apply any differently, in principle, when working for a foreign company from the UK than it does when working for a UK company from the UK. The same degree of diligence is required even if, in practice, it may be difficult for HMRC to verify the working practices by checking-up with the foreign client (the foreign client is not obliged to respond in the same way a UK company is obliged, although HMRC could follow-up with the local tax authorities, in theory). In a case like this, HMRC would probably make a call early on, based on the contract, as to whether it was worthwhile pursuing. However, it would also help to have a Confirmation of Arrangements so that the working practices are clarified.

[Brussels Slumdog]

Grey area

I work remotely in Switzerland for a company in the UK. I pay no tax in the UK whatsoever.

I have worked remotely in Belgium and paid tax in the Netherlands

The important point is "Who is invoicing who" The Netherlands has what is called "Chain Law" If your agent is billing a company in the Netherlands then the Dutch tax authorities will chase the tax from the Dutch company who will then chase your agent
Most agents who are dealing with Dutch clients will not allow you to bill via an umbrella company or your LTD.