Best Options for a UK Working Holiday (from Australia)

[damone8]

thanks for the advice everyone...that's made things alot clearer (particularly around the 5% deemed payment allowance if you use your own ltd). If i did go the Ltd Coy route for arguments sake, I imagine as a British Citizen I wouldn't be legally excluded from this arrangement (particularly as I will be 'non-Resident' for Australian tax purposes....but thats a whole other matter!)

[Gary_Jones]

I'd add that as far as I knew the right to open a LTD company in Britain was limited to citizens who are resident. As a passport holder resident in another country, I think the best you could hope for would be "deemed resident" status after 1 full tax year.

I do quite a bit of travelling and working (Canada / America etc) and am shortly going to Oz myself, if you have a limited company in Oz we *might* be able to sort something out - e.g my company employs you, yours employs me?

Just an idea, PM me for contact details.

[NotAllThere]

I'm not sure how option 3 in the first post is distinguished as a seperate option in its own right from limited coy and umbrella?

By temporary contract I mean a fixed term contract of employment with the employer. I.e. a permie contract - but it's temporary!

[Gonzo]

I thought that the standard procedure for someone in this position was to run through a limited company, don't register for VAT but charge it anyway, then bugger off after two years without paying any tax at all?

[LA1]

You would be entitled to the 5% deemed payment allowance if you use your own ltd but its not just an allowance, you have to have business costs of 5% in order to get the relief.

Your costs thru an Umbrella are unlikely to be 5% as typically their fees are £15 - £30 a week. Also you are anly paying for the services you are using so when you are between contracts (holidaying) there are no fees to pay. With your own ltd an accountant will charge for the year as end of year accounts will be required even if you only work 1 week of the year.

Also you have to purchase your insurances (proff indemnity etc). These will be included from your umbrella so only paying for what you use.

You should call a few to get quotes.

[damone8]

Thanks for the comments - I should've pointed out its a full UK passport (father was born in UK), so I'm a British Citizen (that's what it says in the passport anyway!).

I'm not sure how option 3 in the first post is distinguished as a seperate option in its own right from limited coy and umbrella? In other words, isn't it the fact that I would be undertaking 'temporary contracts' that would allow me to set up either as a limited coy or with a PAYE umbrella? Agency payroll would be the least tax effective from what I've read.

[ASB]

True - but I bet you thrupence ha'penny that it is a full British passport.

Almost certainly, but they did say "never been to the UK before" so they were presumably born out of the UK in which case it is possible the birth was registered outside the UK and then whether it is full or not depends upon the parental nationality.

[NotAllThere]

But he/she doesn't state which sort.

True - but I bet you thrupence ha'penny that it is a full British passport.

[ASB]

Pay attention at the back - he's got a UK passport.

But he/she doesn't state which sort.

[Danbro]

Danbro

Pay attention at the back - he's got a UK passport.

Its a bit early sorry,

Thanks

Neil

[NotAllThere]

If you are on a working holiday VISA which it appears you are ...

Pay attention at the back - he's got a UK passport.

[Danbro]

Danbro Accounting Ltd

Hi,

If you are on a working holiday VISA which it appear you are you wont be able to become a director of a Limited Company, newish rules.

So probably your best option will running through an Umbrella company.

Thanks

Neil

[NotAllThere]

It's GBP, not BPD.

You've four options:

1. Umbrella
2. Ltd co
3. Temporary contract
4. Agency temp

Which you use depends on the nature of your industry. In some sectors 3 is the norm, in others it's 4. IT and engineering typically 1 and 2. Ltd co is best if you can do it.

[damone8]

As of July, I am intending on coming over from Australia and have a working holiday in the UK for a period of between 1-2 years. I have a UK passport, though I have never been to the UK before. I am not in the IT field, so perhaps I'm on the wrong forum, but it seems that the issues around contracting that I am researching are applicable to my situation. I will be looking for contract positions, via recruitment agencies, in the public sector in the area of policy development (most likely clients will be within the social housing sector, or related area, such as a central govt dept, local council or NGO).

Gauging positions / pay rates on my current level of experience, I would envisage winning positions around the 32-34 BPD pa mark (or 2,600-2,800 BPD per month, 16-17 BPD per hr). It is highly probably that I will be working within IR35, in that I would not meet the HMRC definition of 'self employed'.

I was initially attracted to the option of being employed via a PAYE Umbrella and being able to claim back some expenses, whilst not as tax effective as setting up my own Limited Company, would at least be better than being paid direct by the Recruitment Agency. I understand though that even falling within IR35, if I went the Limited option I would pay tax and NI on 95% of my contract rather than the 100% I would with an Umbrella.

Would appreciate some advice on what people think my best option in terms of Umbrella v Ltd (seems like an age old question I know) for my particular circumstances.