Starting first contract soon

[LumbaBread]

So there we go, first contract starting soon.

It is with a company based in US and I will be staying in UK, work from home, for as many hours as required and get paid by the hour. The good part is that I am not limited to 40 hours / week as there is a lot of work waiting for me.

I am trying to get all the details I can about this type of work. From what I can see, it should be clearly way outside IR35 since I am using my own office, equipment, I can work pretty much when I want for as long as I want. The client gives me the requirements and how I implement them is really up to me. This is a back end, web developer role - C#, Sql Server and related technologies.

My Ltd company is formed and waiting, application for bank account in $ and £ should be done soon.
I didn't get an accountant yet as I still have a few weeks to go before I start so I am saving a bit until I actually need one.

I made up my mind about accountants as well, it's one of those companies present on this forums as well, I am not going to name them but they charge £85 / month for various useful things. I'll have my contract reviewed with them when the time comes.

I would appreciate any advice or tips and tricks from people in my situation. The way I see it there are no big issues, I simply invoice them normally, they pay me via Paypal which goes into the company's account and from there taxes and all the rest happen.

Note for NLUK - yes I did read the search tips under Welcome / FAQ and found a couple relevant threads but not that much actual information .

[northernladuk]

Note for NLUK - yes I did read the search tips under Welcome / FAQ and found a couple relevant threads but not that much actual information .

You, my son, are going to go far!

[Safe Collections]

You, my son, are going to go far!

They've got your number

[captainham]

I would appreciate any advice or tips and tricks from people in my situation. The way I see it there are no big issues, I simply invoice them normally, they pay me via Paypal which goes into the company's account and from there taxes and all the rest happen.

Note for NLUK - yes I did read the search tips under Welcome / FAQ and found a couple relevant threads but not that much actual information .

Hopefully they are taking the hit on the fees for using this service, or at least your rate has this factored in? What's wrong with a good old-fashioned international bank payment?

[jamesbrown]

I'm working in a similar scenario, with my main client in the US (it also sounds like we have the same accountant ). Feel free to PM me specific questions if you want.

In terms of VAT, you'll need to apply the place of supply rules but, based on your description, you won't be charging VAT to your client. When you invoice, just note that "These services are outside of the scope of UK VAT." You may want to join the VAT Flat Rate Scheme if you have income from UK sources, as the cut-off threshold is pretty small for profiting from the FRS (buy any expensive equipment first though).

In terms of currency exchange, I believe that Paypal will give you a shocking rate if you use them for the actual exchange (although it's not clear if that's what you had planned). For something approaching the interbank rate, open a USD account in the UK (this won't work for Cater Allen, as their USD accounts don't allow external payments) and an FX account with one of the large brokers (HiFX, Oanda etc.), both in the company name, of course. You can then invoice in USD, receive in your UK USD account, transfer to your FX account and transfer back to your Sterling account. I charge my client a 2% currency conversion fee for the hassle.

[The Spartan]

+1 for HiFX I use them to transfer GBP to CHF and they are very easy to use

[LumbaBread]

I'm working in a similar scenario, with my main client in the US (it also sounds like we have the same accountant ). Feel free to PM me specific questions if you want.

In terms of VAT, you'll need to apply the place of supply rules but, based on your description, you won't be charging VAT to your client. When you invoice, just note that "These services are outside of the scope of UK VAT." You may want to join the VAT Flat Rate Scheme if you have income from UK sources, as the cut-off threshold is pretty small for profiting from the FRS (buy any expensive equipment first though).

In terms of currency exchange, I believe that Paypal will give you a shocking rate if you use them for the actual exchange (although it's not clear if that's what you had planned). For something approaching the interbank rate, open a USD account in the UK (this won't work for Cater Allen, as their USD accounts don't allow external payments) and an FX account with one of the large brokers (HiFX, Oanda etc.), both in the company name, of course. You can then invoice in USD, receive in your UK USD account, transfer to your FX account and transfer back to your Sterling account. I charge my client a 2% currency conversion fee for the hassle.

Hmm this is great info.

I was happy to see Cater Allen offering accounts in USD, but didn't know the rest of the story.

Where would you open an account in USD then ? I approached my own bank about it, Santander and they said they can't do it for me.

[LumbaBread]

Hopefully they are taking the hit on the fees for using this service, or at least your rate has this factored in? What's wrong with a good old-fashioned international bank payment?

Yes, you see I met this client via a freelance website which is setup to use paypal and charges no fees for it. I was thinking to keep using it, althought when this contract starts there's no reason to use said website and their payment methods.

I have my rate and that site charges the client something extra to cover their own fees.

[jamesbrown]

Hmm this is great info.

I was happy to see Cater Allen offering accounts in USD, but didn't know the rest of the story.

Where would you open an account in USD then ? I approached my own bank about it, Santander and they said they can't do it for me.

Most of the major high street names have USD accounts. You could try HSBC, for example. I bank with Cater Allen for Sterling and they are very good to be fair. Give them a call and double-check on their current USD policies; when I last checked, they didn't allow wire payments out, just internal transfers.

[LumbaBread]

Most of the major high street names have USD accounts. You could try HSBC, for example. I bank with Cater Allen for Sterling and they are very good to be fair. Give them a call and double-check on their current USD policies; when I last checked, they didn't allow wire payments out, just internal transfers.

Thanks James, I'll give them a call and ask.