UK Agency refusing to pay contract invoice for work carried out. Please help.

[Gene Woodman]

Dear All,

The situation:

1. my LTD company had a contract for 6 months with a UK agency to carry out work in the Netherlands

2. All contracts submitted and signed were between the recruitment agency's UK limited company and my UK limited company

3. Upon submission of my final months invoice the recruitment agency demanded to see my proof of paying dutch taxes before releasing payment

4. From doing my research I spoke to their contracts division and mentioned that as an employment agency business they should have put me on their payroll and organised me to contract under a dutch umbrella.

5. I have since then, submitted my companies returns and paid UK taxes on the invoices submitted to the agency.

As things stand the agency owes me 4000euro which they are not paying unless I instruct them to put me under a backdated payroll for 6 months, credit them all my invoices and for their payroll company to pay me under dutch tax laws.

Can someone advise me if this is allowed? I'm extremely confused and would appreciate any feedback on the above.

Gene

[tarbera]

whats the problem.?

Dear All,

The situation:

1. my LTD company had a contract for 6 months with a UK agency to carry out work in the Netherlands

2. All contracts submitted and signed were between the recruitment agency's UK limited company and my UK limited company

3. Upon submission of my final months invoice the recruitment agency demanded to see my proof of paying dutch taxes before releasing payment

4. From doing my research I spoke to their contracts division and mentioned that as an employment agency business they should have put me on their payroll and organised me to contract under a dutch umbrella.

5. I have since then, submitted my companies returns and paid UK taxes on the invoices submitted to the agency.

As things stand the agency owes me 4000euro which they are not paying unless I instruct them to put me under a backdated payroll for 6 months, credit them all my invoices and for their payroll company to pay me under dutch tax laws.

Can someone advise me if this is allowed? I'm extremely confused and would appreciate any feedback on the above.

Gene

If your agents can not prove to the dutch taxman you have paid your dutch tax (you should have) then they have to pay it (and get a fine) and your dutch tax is going to be more than 4000eurs anyway you probably owe double that at least. (might even be 12K as I take it you did not get a 30% Ruling)

I suspect they will also grass you into the dutch taxman who make UK taxmen look like your lover

[Gene Woodman]

If your agents can not prove to the dutch taxman you have paid your dutch tax (you should have) then they have to pay it (and get a fine) and your dutch tax is going to be more than 4000eurs anyway you probably owe double that at least. (might even be 12K as I take it you did not get a 30% Ruling)

I suspect they will also grass you into the dutch taxman who make UK taxmen look like your lover

Should they not have put me on their payroll initially? I thought this was law? Why would they give me a UK contract if they want me to pay Dutch taxes and not UK taxes?

[tarbera]

They should have yes

Should they not have put me on their payroll initially? I thought this was law? Why would they give me a UK contract if they want me to pay Dutch taxes and not UK taxes?

But dont think you will have a leg to stand on with the Dutch taxman he will want paid from you for you breaking dutch laws.

If you hand back all your invoices back, you will end up with about 50% (no 30% ruling or sofi number i take it) net pay - with No UK taxes due.

[SueEllen]

Some contracts have a clause in them that if you don't or found not to have paid your taxes the agency can recover the money from you, and you are liable for any extra costs the agency incurs.

I suggest you read your contract properly as lots of contractors are unaware that their contract has a clause like this.

Also the fact the contract may say HMRC doesn't mean the agency won't co-operate with any other countries' taxman.

Edited to say: It's perfectly legal to give someone a contract bound by the terms of another EU countries' law even though the tax and VAT regimes the contract falls under are all completely different. This is what happens when you do cross-border business.

[stek]

But the gospel according to Boo says you're ok for 183 days paying UK tax, this proves that approach is nonsense.

[SueEllen]

But the gospel according to Boo says you're ok for 183 days paying UK tax, this proves that approach is nonsense.

I've met contractors who are one-man bands who think this.

Unfortunately they haven't realised that not all contractors are one-man bands and the difference between personal and company taxes.

[Kanye]

The more I read on here it seems that contracting in Europe is a mine field which is more hassle than it's worth!

[yasockie]

The more I read on here it seems that contracting in Europe is a mine field which is more hassle than it's worth!

I did a few short gigs, well under 6 months, all through my UK Ltd, did 0 non-UK paperwork, to my knowledge and belief I didn't fall foul of any double-taxation treaties.
I really don't understand why you should pay NL tax for a 6-months role, surely including the weekends etc you were there less than 183 days?

[Gene Woodman]

I did a few short gigs, well under 6 months, all through my UK Ltd, did 0 non-UK paperwork, to my knowledge and belief I didn't fall foul of any double-taxation treaties.
I really don't understand why you should pay NL tax for a 6-months role, surely including the weekends etc you were there less than 183 days?

Are you saying that is you work in the NL through your UK LTD for under 183 days, you do not need to pay NL taxes?

Thanks