I live in Switzerland and work remotely for a UK company with no Swiss presence. I invoice them without (the local equivalent) of VAT, through my Swiss ltd company. When I travel on their behalf, I add the costs of travel and subsistence to the invoice. The UK tax authorities are not involved; all tax matters are entirely Swiss.
This seems to be pretty much your scenario, substituting UK for Swiss and Canada for UK.
In your case, I would set up as a ltd co in the UK, as this gives you the added protection of limited liability - something not to be knocked. With the working arrangements you describe, IR35 is extremely unlikely, in my opinion, to matter a jot. An umbrella company would be a waste of money. As you are supplying services offshore, to a non-EU company, you won't be adding VAT to your invoices. However, your turnover may mean you should be vat registered. I'd go for it anyway, as without VAT registration, you can't claim VAT back on your office purchases.
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Previously on "Contracting for a Canadian company... self-employed vs Ltd vs Umbrella"
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You shpuld talk to Qdos or similar re the IR35 review, and whilst on that get some quotes for insurance. In my experience premiums are very high when working in or for North American companies.
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In terms of expenses, are you required to claim these separately through whatever expense system your client has in place? Ordinarily, if going the Ltd route, there would simply be a line on the sales invoice and any claims are then between you and YourCo (and HMRC).
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Originally posted by Gandalf2074 View Post@BlasterBates and @Sally@InTouch: company is based in Canada and does not have local presence. I will work from home in UK (and travel a lot across Europe, limited time will be spent in Canada). I am UK tax resident and I have been made redundant by my previous employer (with whom I was permanent).
@Sally@InTouch: I thought you could deduct expenses when self-employed, isn't that the case? Same for pension... isn't it the same between LTD and Sole Trader? There won't be any agency, the contract will be between me and the Canadian company.
Thanks both for all your help!
Kind Regards,
Stefano
Get the contract checked though and take some advice from a qualified accountant.
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Originally posted by Gandalf2074 View Post@BlasterBates and @Sally@InTouch: company is based in Canada and does not have local presence. I will work from home in UK (and travel a lot across Europe, limited time will be spent in Canada). I am UK tax resident and I have been made redundant by my previous employer (with whom I was permanent).
@Sally@InTouch: I thought you could deduct expenses when self-employed, isn't that the case? Same for pension... isn't it the same between LTD and Sole Trader? There won't be any agency, the contract will be between me and the Canadian company.
Thanks both for all your help!
Kind Regards,
Stefano
At the end of the day, the limited company inside IR35 will pay you slightly more than sole trader.
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You need to find yourself an accountant either way and ask them all these questions IMO. You don't want to be chancing a whole years income on advice based on very basic details on a free forum...
Are you sure they will take you on as a sole trader? Not many (if any) clients will here.
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@BlasterBates and @Sally@InTouch: company is based in Canada and does not have local presence. I will work from home in UK (and travel a lot across Europe, limited time will be spent in Canada). I am UK tax resident and I have been made redundant by my previous employer (with whom I was permanent).
@Sally@InTouch: I thought you could deduct expenses when self-employed, isn't that the case? Same for pension... isn't it the same between LTD and Sole Trader? There won't be any agency, the contract will be between me and the Canadian company.
Thanks both for all your help!
Kind Regards,
Stefano
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Originally posted by BlasterBates View PostWhen you say you're working for a Canadian company, do you mean in Canada, i.e. not through a UK subsiduary?.
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Originally posted by Gandalf2074 View PostHello everyone,
I will be contracting for a Canadian company providing them business development services. The contract says I am expected to work for 1840 hours (i.e. 255 work days - 25 days leave) but this will not be strictly enforced. On top of the contract value there is a discretionary bonus and there is ane exclusivity clause as well.
The company will pay for expenses (transportation, hotel, lunch) but not office set-up (computer, telephone, internet).
Given the above I believe this would fall under IR35 if I set up a LTD. Am I right in saying that being self-employed/sole trader would likely be the more efficient option?
Or would the LTD option still viable? Could you see any advantage in using an umbrella company?
The contract value will be £77,000 - does this mean I will have to register for VAT?
Thanks and Regards,
Stefano
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Originally posted by Gandalf2074 View PostHello everyone,
I will be contracting for a Canadian company providing them business development services. The contract says I am expected to work for 1840 hours (i.e. 255 work days - 25 days leave) but this will not be strictly enforced. On top of the contract value there is a discretionary bonus and there is ane exclusivity clause as well.
The company will pay for expenses (transportation, hotel, lunch) but not office set-up (computer, telephone, internet).
Given the above I believe this would fall under IR35 if I set up a LTD. Am I right in saying that being self-employed/sole trader would likely be the more efficient option?
Or would the LTD option still viable? Could you see any advantage in using an umbrella company?
The contract value will be £77,000 - does this mean I will have to register for VAT?
Thanks and Regards,
Stefano
If you're caught by IR35 (get a review, don't assume) then you can still trade through a limited company paying yourself a deemed payment after 5% of the contract rate is allowable as a tax deduction. You can also have pension contribution to deduct against tax whilst inside IR35, and some profit by being on the VAT flat rate scheme, although you may need to look at the place of supply.
Self-employed maybe an option if there is no agency involved, the national insurance is lower than that of PAYE (9%), the tax rates are the same but you would have no expenses or the VAT flat rate profit.
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Contracting for a Canadian company... self-employed vs Ltd vs Umbrella
Hello everyone,
I will be contracting for a Canadian company providing them business development services. The contract says I am expected to work for 1840 hours (i.e. 255 work days - 25 days leave) but this will not be strictly enforced. On top of the contract value there is a discretionary bonus and there is ane exclusivity clause as well.
The company will pay for expenses (transportation, hotel, lunch) but not office set-up (computer, telephone, internet).
Given the above I believe this would fall under IR35 if I set up a LTD. Am I right in saying that being self-employed/sole trader would likely be the more efficient option?
Or would the LTD option still viable? Could you see any advantage in using an umbrella company?
The contract value will be £77,000 - does this mean I will have to register for VAT?
Thanks and Regards,
StefanoTags: None
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