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Working from European country on UK contract

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    Working from European country on UK contract

    I was told by Opus Recruitment that they non-negotiable need UK citizens right to work in UK.
    How is situation in UK? And does IR35 has impact on the possibility of working from Central Europe as for example Czech Republic formed company?
    I have read that when inside IR35 its just waste of my time if I am not based in UK.
    And what other agencies with outside IR35...In nutshell in case of getting contract there is requirement to have two companies one for invoicing UK Limited and second Czech? Or could I store as value my income in UK LTD and then if desired to buy some properties on this firm in my country? Sorry for lot of questions, I am full stack software engineer with skills in Javascript, Java, Vue, Node...AWS and got some idea to try contracting directly unlike my current contract facilitated through Czech Rep middleman company to States.

    #2
    If you want to continue working in the Czech Rep. you're going to have to continue working via a Czech Rep middleman. The alternative would be to set up your own company in the Czech Republic. As you've mentioned you could invoice via a UK Ltd company. You have to be careful though about hoarding money in a UK company as the Czech tax authorities might take a dim view of that. I would move most of the income other than enough to cover the cost of running the UK Ltd back to the Czech Rep, via either a middleman or your own company. They would probably view all income as being taxable there if you're working 100% remote.

    I would take advice from an accountant as it is complicated and none of us here are tax advisors.
    Last edited by BlasterBates; 4 June 2022, 08:43.
    I'm alright Jack

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      #3
      You also have to consider if the client will agree to the work not being done by someone located in the UK, hence the requirement for the person to have the right to work in the UK.

      They might tolerate occasional working outside of the UK but not permanent.

      Comment


        #4
        Some contractors struggle to find outside contracts, depending on their skillset or market sector. So you need to be realistic - this is the most important point concerning the whole setup.

        1. If you have outside IR35 contracts, IMO the UK LTD-CZ SRO setup you suggest would be the most flexible and tax efficient.
        2. You will have double accountancy fees, so your billable rate needs to be good to justify.
        3. There are many temptations to cut corners with tax in either country. Tempting but not sustainable. You need to educate yourself on best ways of operating, and get the companies setup correctly from the beginning (->accountants will advise).
        4. Familiarise yourself on Controlled Foreign Companies and Transfer Pricing.
        5. If you are expecting to work remotely from CZ inside IR35, agents in the UK will expect you to work through a UK umbrella company, which makes any limited company setup irrelevant. The requirement for you to be in the UK -- as ladymuck said -- may also be an issue.

        Comment


          #5
          Originally posted by lecyclist View Post
          Some contractors struggle to find outside contracts, depending on their skillset or market sector. So you need to be realistic - this is the most important point concerning the whole setup.

          1. If you have outside IR35 contracts, IMO the UK LTD-CZ SRO setup you suggest would be the most flexible and tax efficient.
          2. You will have double accountancy fees, so your billable rate needs to be good to justify.
          3. There are many temptations to cut corners with tax in either country. Tempting but not sustainable. You need to educate yourself on best ways of operating, and get the companies setup correctly from the beginning (->accountants will advise).
          4. Familiarise yourself on Controlled Foreign Companies and Transfer Pricing.
          5. If you are expecting to work remotely from CZ inside IR35, agents in the UK will expect you to work through a UK umbrella company, which makes any limited company setup irrelevant. The requirement for you to be in the UK -- as ladymuck said -- may also be an issue.
          1. according clarity umbrella co if my daily rate will be 700pd inside IR35 total *21 days on average makes 14,700 monthly.
          Monthly Income £14,700.00
          Employer National Insurance £1,803.03
          Employment Tax £63.69
          Employee National Insurance £723.85
          Employee Tax £4,047.78
          Total All Tax £6,638.35
          Margin £95.00
          Total Net Income £7,966.65
          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 .

          I don't know all the details where these Total All Tax will end I guess that inside IR35 I am paying taxes to UK through umbrella even I
          am tax resident of Czech Republic. And probably I have obligation to fulfill tax declaration again in my country with some checkboxes which prevents
          double taxation.

          2. So I have choosen Outside 35 and own LLC but still confused about transfering money between my two companies, need to more familiarise myself with Controlled Foreign Companies and Transfer Pricing. Hopefully there is no additional tax here I need hoarding cash in my Czech company and be invoiced in (UK company + revolut).

          5. good to know about limitation of be present in UK, but there must be way in 21 century to contract UK from Europe as we have international trade.
          Is UK company must have or there is slight possibility to deal it with one foreign Czech Company?. I am besides not UK based so when they allow me trade, maybe set up own LLC is irrelevant too and agency allows me contracting with my domestic company.

          Comment


            #6
            You don’t choose whether the contract is outside or inside IR35, in most cases the decision is made by the end client
            merely at clientco for the entertainment

            Comment


              #7
              Originally posted by lackorol View Post

              5. good to know about limitation of be present in UK, but there must be way in 21 century to contract UK from Europe as we have international trade.
              Is UK company must have or there is slight possibility to deal it with one foreign Czech Company?. I am besides not UK based so when they allow me trade, maybe set up own LLC is irrelevant too and agency allows me contracting with my domestic company.
              If the client wants the person to be UK based then that's all there is to it. It's not a law, it's a stipulation from the client based on a whole heap of considerations that you'll never get visibility of. It could be as simple as company policy right up to working on Top Secret code on an air-gapped computer that doesn't leave a secure bunker.

              If never setting foot in the UK while servicing a contract for a UK based company is one of your requirements then you need to check that with the client / agency right at the very beginning before you start working out what company structure you will use for invoicing and income transfer.

              Comment


                #8
                Very very few agencies will do business with you if you don't have a UK ltd. Unless there is some spectacular about you then your set up is going to be far too complicated to get their head around so they'll just pick on of the people from the stack of UK based CV's they undoubtedly have already.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  Originally posted by northernladuk View Post
                  Very very few agencies will do business with you if you don't have a UK ltd. Unless there is some spectacular about you then your set up is going to be far too complicated to get their head around so they'll just pick on of the people from the stack of UK based CV's they undoubtedly have already.
                  Why is for agency less bureaucratic hurdle to deal with UK ltd. instead Czech Rep company?

                  Comment


                    #10
                    Originally posted by lackorol View Post

                    Why is for agency less bureaucratic hurdle to deal with UK ltd. instead Czech Rep company?
                    Because it is - and even if it isn't agencies are risk adverse - any issue and they will move on to the next possible option.

                    merely at clientco for the entertainment

                    Comment

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