Reply to: Living abroad, working in UK

[fidot]

Agree, but the new rules from next april are still likely to be applied to yourco by uk clients.

[skysies]

I see this as a B2B relationship, where I work remotely for a client in the UK. I don't see a reason why the IR35 should apply to me?

[NotAllThere]

Well, I'm not so sure about that. Even if HMRC classifies me as a non-tax resident, will that exempt me from IR35, if my client is based in the UK?

If you are not liable to UK tax, then you cannot possibly be affected by IR35. However - agencies, clients and HMRC might have severe difficulty in comprehending this.

[GhostofTarbera]

Well, I'm not so sure about that. Even if HMRC classifies me as a non-tax resident, will that exempt me from IR35, if my client is based in the UK?

No


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[skysies]

No. IR35 is a personal tax. You're not taxed in the UK.

Well, I'm not so sure about that. Even if HMRC classifies me as a non-tax resident, will that exempt me from IR35, if my client is based in the UK?

[NotAllThere]

.... will that even apply to me?

No. IR35 is a personal tax. You're not taxed in the UK.

[skysies]

I'm considering something similar- working for a UK client, while residing in an EU country. The work will be done mostly WFH, with some occasional trips to the London office.

It will be easy for me to prove to the HMRC that my residency shifted there, as I will be taking my family with me, no property in the UK, etc..

Now the question is when the client declares me inside IR35 in Apr-21, will that even apply to me?

[Old Greg]

Be careful, many sharks out there. Take a look at -

i-paye - I-PAYE | UK and European Umbrella Services

And ask for Sue.

[Whorty]

Interesting info guys. Not for me personally, not looking to live abroad, but interest piqued due to GoT's comment to LM

[NotAllThere]

I can see a number of employed peeps looking at option 4 but wonder how many employers will support it.

It's a regularly asked question on the Swiss expat forums, so while not common, it does happen. Some of those employers are British. Once they know the rules, they're happy.

Re: 2, are there any/many foreign based brolly's?

By foreign based, I mean a brolly in your country of residence.If you were living in Switzerland, for example, you could contract to an overseas client via any Swiss payroll company. Again, the issue would be whether the UK agency would be happy to do that - I know for sure it isn't impossible.

A few trips to the UK for meetings won't be an issue, but as BB points out, anything substantive will complicate your affairs, so best, IMO, avoided.

[BlasterBates]

I can see a number of employed peeps looking at option 4 but wonder how many employers will support it.

Re: 2, are there any/many foreign based brolly's? Looked on Contractor Umbrella site and couldn't see they supported this or have any overseas branches. Maybe a gap in the market with the (possible) push for more WFH?

Using a foreign based brolly to work in the UK is not a good idea, you need to ensure tax and NI are correctly paid in the UK. You need a local accountant to then assist you in submitting tax returns in the country you live at the weekend. Brolly companies generally don't provide this sort of service.

If you are intending to WfH, this changes everything you need a split contract.

As indicated above contact Sue at I-Paye https://www.contractoruk.com/forums/...ief-guide.html

The rule is you are taxed on the income based on where you physically do the work, therefore you need two separate incomes, taxed in different countries. Sue at I-Paye can probably help.

WfH in a country will significantly strengthen your case that your main residency is there.

[BlasterBates]

If you live abroad but commute to the UK to work, then your employment income is subject to UK tax and National Insurance, you also declare it where you live. Depending on how much UK tax you pay you may pay a bit of extra tax where you're resident. Dividends from your Ltd company are treated similarly. They are taxed primarily in the UK but need to be declared in your country of residence.

Where it gets complicated is when you have investment income, this will only be declared in the country where you are mainly resident. If you have a family then you are mainly resident where your family is, provided you return regularly. If your family is in France and you return at the weekend but you work in the UK, then France will be considered your main residency and you pay tax there. You need to give this information to your bank. The problem arises when you have significant income that at some point the country where you don't pay tax will inevitably enquire why not, and you will be expected to provide proof of your main residency. In fact it is better from the start using accountants that this is clarified. If you are married and your wife is in France this is generally straightforward. HMRC will accept this. If you're single then it can be a headache as HMRC would have a good argument that your main residency is the UK, and so too the authorities where you return to at the weekend.

[Fred Bloggs]

I can see a number of employed peeps looking at option 4 but wonder how many employers will support it.

Re: 2, are there any/many foreign based brolly's? Looked on Contractor Umbrella site and couldn't see they supported this or have any overseas branches. Maybe a gap in the market with the (possible) push for more WFH?

Be careful, many sharks out there. Take a look at -

i-paye - I-PAYE | UK and European Umbrella Services

[Whorty]

Obviously, tax and social contributions are due where you work, regardless of client location - although there are some wrinkles in this in some countries.

How you set ip varies from country to country.
1. Work through the local equivalent of a ltd company - that's what I did.
2. Work through a local payroll company (aka brolly) who bill the agency, just as in the uk.
3. Work as a sole trader - difficulty here is getting the agency to agree.
4. Be an employee of a UK company that takes their admin fee, but pays the rest over without deductions. You then declare to the authorities that you're an employee of an overseas company paid gross, and you account for employer and employee social deductions and tax yourself. In Switzerland it's called ANobAG (Arbeitnehmer ohne beitragspflichtigen Arbeitgeber = Employees without an employer subject to contributions). Last time I checked, the UK don't have any provision for this scenario. You'd have to check for France/Spain.

The difficulty with 1&2 is that some agencies won't deal with offshore ltd companies - even if they're manifestly not in tax havens.

I can see a number of employed peeps looking at option 4 but wonder how many employers will support it.

Re: 2, are there any/many foreign based brolly's? Looked on Contractor Umbrella site and couldn't see they supported this or have any overseas branches. Maybe a gap in the market with the (possible) push for more WFH?

[NotAllThere]

Obviously, tax and social contributions are due where you work, regardless of client location - although there are some wrinkles in this in some countries.

How you set ip varies from country to country.
1. Work through the local equivalent of a ltd company - that's what I did.
2. Work through a local payroll company (aka brolly) who bill the agency, just as in the uk.
3. Work as a sole trader - difficulty here is getting the agency to agree.
4. Be an employee of a UK company that takes their admin fee, but pays the rest over without deductions. You then declare to the authorities that you're an employee of an overseas company paid gross, and you account for employer and employee social deductions and tax yourself. In Switzerland it's called ANobAG (Arbeitnehmer ohne beitragspflichtigen Arbeitgeber = Employees without an employer subject to contributions). Last time I checked, the UK don't have any provision for this scenario. You'd have to check for France/Spain.

The difficulty with 1&2 is that some agencies won't deal with offshore ltd companies - even if they're manifestly not in tax havens.