Reply to: Foreign (EC) contractor working in UK

[SueEllen]

In addition don't get tax advice from a general solicitor; speak to a qualified tax solicitor.

WHS but be wary. There are some accountants and lawyers who say they can advise in an area but can't. When tulip hits the fan they disappear.

[pmasoft]

Get the appropriate expert for the corresponding field. So don't get legal advice from an accountant.

In addition don't get tax advice from a general solicitor; speak to a qualified tax solicitor.

[SueEllen]

Thanks. I will talk to an accounting/legal expert in this area to get an advice before going further.

Get the appropriate expert for the corresponding field. So don't get legal advice from an accountant.

[Asgeir]

True but unfortunately when you start digging into the UK market you will realise how little UK agencies and some UK clients understand about tax law and law involving contracts in general.

Your best bet is to set up a UK limited company as they take hours to set up and find a UK accountant. It's not difficult.

The main difficulty you will have is calculating any additional personal taxes you have to pay in Iceland if you are considered resident there also.

Also if you do set up a UK limited company regardless of whether you set it up in England and Wales, Scotland or NI and work through that make sure any contracts you get are checked by a legal expert for both IR35 and general clauses.

Thanks. I will talk to an accounting/legal expert in this area to get an advice before going further.

[SueEllen]

Thanks for your advice all. I assumed I would get an email when my question was approved so I didn't realize there were already answers.

I can understand why UK companies or agencies wouldn't want to work with foreign companies but I didn't think it would be illegal. Foreign companies must sell their services to the UK all the time without having legal entities there?

True but unfortunately when you start digging into the UK market you will realise how little UK agencies and some UK clients understand about tax law and law involving contracts in general.

Your best bet is to set up a UK limited company as they take hours to set up and find a UK accountant. It's not difficult.

The main difficulty you will have is calculating any additional personal taxes you have to pay in Iceland if you are considered resident there also.

Also if you do set up a UK limited company regardless of whether you set it up in England and Wales, Scotland or NI and work through that make sure any contracts you get are checked by a legal expert for both IR35 and general clauses.

[Asgeir]

Thanks for your advice all. I assumed I would get an email when my question was approved so I didn't realize there were already answers.

I can understand why UK companies or agencies wouldn't want to work with foreign companies but I didn't think it would be illegal. Foreign companies must sell their services to the UK all the time without having legal entities there?

I know that it is rather easy to start a ltd in the UK so I might do that but I would rather not have to deal with having two companies with two different set of rules and tax authorities.

Again thanks for giving your time to discuss this

[BlasterBates]

Think you missed the point I was making re foreign companies working in the UK. I am sure that some countries have hoops to jump through but that does not stop one from looking as was implied in the previous post which I was commenting on.

UK agencies are a point in case as they refuse to work with overseas companies in most instancies, but suspect that is more them trying to cover their rears then any legal requirement.

The problem is that contracting is subject to the rules on employment intermediaries and use of PSC's, clients and agencies are obliged to ensure everything is above board otherwise they potentially take a hit. That's why you can use a foreign company but it will need to be adequately registered in the UK, otherwise both clients and agencies will generally ignore you (but not always).

[Batcher]

Think you missed the point I was making re foreign companies working in the UK. I am sure that some countries have hoops to jump through but that does not stop one from looking as was implied in the previous post which I was commenting on.

UK agencies are a point in case as they refuse to work with overseas companies in most instancies, but suspect that is more them trying to cover their rears then any legal requirement.

Fair enough. There's nothing to stop anyone looking for work anywhere.

[pmasoft]

I believe The Netherlands and Belgium, amongst others, insist you can't work through your UK Ltd over there. You must start up a local company or work through an umbrella.

I've worked in Luxembourg through my Ltd but it was a short contract and the agency was in Belgium. I was paid (eventually) in Euros.

Think you missed the point I was making re foreign companies working in the UK. I am sure that some countries have hoops to jump through but that does not stop one from looking as was implied in the previous post which I was commenting on.

UK agencies are a point in case as they refuse to work with overseas companies in most instancies, but suspect that is more them trying to cover their rears then any legal requirement.

[Batcher]

Why wouldn't an Icelandic contractor company look for work in the UK? UK contractors via their UK companies look for work abroad all the time.

I believe The Netherlands and Belgium, amongst others, insist you can't work through your UK Ltd over there. You must start up a local company or work through an umbrella.

I've worked in Luxembourg through my Ltd but it was a short contract and the agency was in Belgium. I was paid (eventually) in Euros.

[BlasterBates]

Why wouldn't an Icelandic contractor company look for work in the UK? UK contractors via their UK companies look for work abroad all the time.

Of course he can use his icelandic company but you would have to register it and by the time you've gone through the process you might as well start up a UK company.

You can't just go and do business in a foreign country and not register, though I know there are UK contractors that do and get into hot water.

[pmasoft]

Yes you need to start a UK Ltd company, or go through an Umbrella or register your Icelandic company in the UK, which is not worth doing, i.e. start a UK company or register with a UK based umbrella.

If you are working at UK based clients you need to tax it on the UK even if you are there for less than 6 months in the year. If you are in the UK less than 6 months you only tax UK income, not Icelandic income and obviously it will be taxed at the lower tax rate.

There are exceptions, such as if you are working for an Icelandic company and you are sent to the UK for a while, but I doubt very much whether that is the case. Obviously in that case you wouldn't be billing a UK agency.

Why wouldn't an Icelandic contractor company look for work in the UK? UK contractors via their UK companies look for work abroad all the time.

[BlasterBates]

Yes you need to start a UK Ltd company, or go through an Umbrella or register your Icelandic company in the UK, which is not worth doing, i.e. start a UK company or register with a UK based umbrella.

If you are working at UK based clients you need to tax it on the UK even if you are there for less than 6 months in the year. If you are in the UK less than 6 months you only tax UK income, not Icelandic income and obviously it will be taxed at the lower tax rate.

There are exceptions, such as if you are working for an Icelandic company and you are sent to the UK for a while, but I doubt very much whether that is the case. Obviously in that case you wouldn't be billing a UK agency.

[TheFaQQer]

Not sure why you are concerned about VAT, you charge it and you pass it on, clients have also no concerns as they do the same. All rates are quoted excluding VAT.

Unless the client isn't VAT registered or is exempt from VAT.

In which case you need to make sure that everyone is talking the same price.

[Eirikur]

Not sure why you are concerned about VAT, you charge it and you pass it on, clients have also no concerns as they do the same. All rates are quoted excluding VAT.
Unless you have some very specific sought after skills It will be very hard to find a contract if you do not have a UK based contact address and Ltd company.