Working from European country on UK contract

[northernladuk]

Why is for agency less bureaucratic hurdle to deal with UK ltd. instead Czech Rep company?

Well just look at this thread for a start. We are all having a pop at it and it's complicated. If we can't easily get to the bottom of it do you think a glorified salesperson that is only bothered about their bottom line is going to be able to understand it. Even if it isn't any more difficult to deal with an agent will have to do the research to find that out. Why should they bother when the next CV is the perfect person for the gig and is UK based. You don't have to put a log of complexity in front of an agent for them to move on to the next person.

[AndrewK]

Do I need apply for VAT with this LTD after reaching 85 000 pounds threshold?

In simplified terms - VAT is not applicable (EU VAT place of supply rule).

[eek]

In simplified terms - VAT is not applicable (EU VAT place of supply rule).

And again too complex for your average agency

[AndrewK]

You have to be careful if you pay tax in the UK even though you are working in the Czech Republic. Normally they will take into account tax paid in the UK, but they may decide to enquire into your UK earnings, simply because they may well be miffed that you would not be paying tax in the Czech Republic. In this case they may ask for proof for travel and working in the UK. If you can't prove this they may well decide you shouldn't have been paying tax in the UK and charge tax in the Czech Republic. In other words you could end up being taxed twice because the Czech Republic deem your UK tax as unlawful.

How can it be *unlawful* if that is covered by a double taxation agreement? Also typically in such an arrangement, you set up a local LTD and bill a UK company using. That is the only profitable way. If you are using UK Payroll (inside), you could claim taxes back using self-assessment sa102, sa109 + HS302. But you will need proof that you have paid taxes in a foreign country.

[AndrewK]

And again too complex for your average agency

In my experience, once you tell an agency, that you are not UK based, they will drop you. Such an arrangement is possible only directly or via an agency that specialises in cross-border contracts.

[BlasterBates]

How can it be *unlawful* if that is covered by a double taxation agreement? Also typically in such an arrangement, you set up a local LTD and bill a UK company using. That is the only profitable way. If you are using UK Payroll (inside), you could claim taxes back using self-assessment sa102, sa109 + HS302. But you will need proof that you have paid taxes in a foreign country.

UK employment income is covered by the double taxation treaty but if you are actually working in the Czech Republic it isn't UK employment income and therefore the Czech tax authorities will demand tax in the Czech Republic.

[ConsultingTechArchitect]

I've done this in several countries. The answer is really f-ing simple.

HIRE A TAX PROFESSIONAL (or one in each country in your case).

[eek]

I've done this in several countries. The answer is really f-ing simple.

HIRE A TAX PROFESSIONAL (or one in each country in your case).

That solves the money issues it doesn’t solve the getting Work issues

[Lance]

This is huge tax deduction approx 45% tax comparing against my own set up LLC
even if my contract would be only 500pd IR35 outside
Monthly Income means 10,500*0.80 (Corporate Income Tax 20%) equals 8400

Anyway I have conducted that this scheme inside iR35 + umbrella is really not so much efficient .

you are not comparing the same things.
the umbrella taxes personal income and the remainder is yours to spend. all done. You keep 55%.

when you pay corporation tax ( no such thing as corporate income tax), it’s still the company’s money. To get out you need to take income and pay more tax on that.

[ConsultingTechArchitect]

That solves the money issues it doesn’t solve the getting Work issues

What's the problem here? There are three viable options.

1. You only work with clients that are happy for you to be abroad (plenty of organisations are scared of this).

2. You don't tell your clients where you are based and you take relevant SecOps precautions to make sure nobody finds out.

3. You work with clients in your locale (and accept the reduced rates etc.)

I'm not saying any of these options are right or wrong. I'm saying these are your only options.