Reply to: Contracting in Holland...

[XperTest]

So you currently pay 50% ?

Yup..

One of the reasons why I need to sort my own VAR and Ltd out fast.

[Angela_D]

I was once accidentally sent my financial overview based on the 30% allowance, and the net effect was an increase in takehome from 50% to about 65% IIRC.

So you currently pay 50% ?


65% take-home is just a touch too low for me. Borderline if it is acceptable. I may interview just to get a feel for it. If lot of other factors are all positive then I would do it.

[XperTest]

On a PAYE payroll kind of a deal what's your net take home on EUR600 ?

Agent has told me that 65% is to be expected.

PLUS daily rates aren't allowed. Has to be hourly. that suits me in fact as sometimes there will be overtime.

I think that's about right. I was once accidentally sent my financial overview based on the 30% allowance, and the net effect was an increase in takehome from 50% to about 65% IIRC. Foor 600 Euros/day that would mean a takehome of approx 5650 pounds based on a 21 day month.

I recommend AAME from Delft as accountants. They seem to know what they're talking about and have dealt with UK contractors frequently in the past so should be able to advise. They charge 136 Euros/month. From what I've seen it's fairly "normal" in Holland for contracts to include sick pay and 20 days paid leave/year. Not sure where that leaves UK people wanting to work outside UK tax legislation IR35 in Holland.

[Angela_D]

On a PAYE payroll kind of a deal what's your net take home on EUR600 ?

Agent has told me that 65% is to be expected.

PLUS daily rates aren't allowed. Has to be hourly. that suits me in fact as sometimes there will be overtime.

[Paddy]

Whats the preferred alternative to a Ltd...? Any advice welcome...

You can use your UK Ltd up to three months in Holland

PS I used mine for three years.

[XperTest]

There is no Ltd route in the Netherlands. One man service companies are Verboten (as they are in Germany).

tim

Not true as far as I know. As a contractor in Holland, you need to fill in a so called VAR (Verklaring Arbeids Relatie, or work relationship statement) form detailing your work practices (i.e. number of (concurrent) customers, marketing effort, through agencies or direct etc) that is used by the Dutch HMRC to determine "IR35 status" (well, the Dutch equivalent) in advance for the year. Based on this an advice is given, which roughly dictates whether you are allowed to go Ltd or should use temporary contracts (your customer pays your taxes direct to HMRC in this case). Afterwards they will then determine how you've actually conducted your business and may review their initial assessment.

I may be horribly wrong though as I'm still relatively new to this myself, but I am 100% certain that some of the contractors on my site are Ltd.

[tim123]

Hi........ what's the situation with you right now ?

I'm looking at a position there for between 525-600 euro.

Need to know take-home. Maybe not worth it.

I don't have a UK address (perhaps I could find one) so may miss the 30%

You don't need a UK address for the 30%.

You just need to not be Dutch (or currently resident)

tim

[Angela_D]

Hi........ what's the situation with you right now ?

I'm looking at a position there for between 525-600 euro.

Need to know take-home. Maybe not worth it.

I don't have a UK address (perhaps I could find one) so may miss the 30%

[mcquiggd]

Cheers Tim,

it seems that a Dutch registered company running a Payroll service / effectively working PAYE with a charge somewhere between 10% and 20% is the norm, but the 30% tax break which I am pretty certain I would qualify for (still have an address in the UK, which would be my contact addressfor the duration of the contract).

There does seem to be conflicting advice about whether you can (legally) claim back flights and keep the 30%, so I have emailed several Dutch 'management companies' that handle payroll etc to see what the consensus is. Direct tax is higher (although comporable if not cheaper than the UK if you include stealth taxation), and that 30% rule is the clincher...

Seems that cost of living is lower than most cities in terms of the day to day essentials.

Accomodation is the next thing.. might be interested in a flatshare to keep costs down / meet people.... seems to be a few notice boards that range from 450 euros to 600 euros a month for an all inlusive room, internet enabled etc.

The previous guy who took the role stayed for a year so it seems like it may be a long term proposition... he was on 600 euros a day and I am more qualified so closer to £460 than £405 is on offer... tempting....

[hyperD]

Many thanks for the reply Tim - just looked at my original question and didn't mention that all this UK work is direct to client, fixed priced and NO agencies.

Do the Dutch businesses treat this scenario still as a PSC? How do they deal with UK SMEs?

[tim123]

McQ, AIUI the only legal way of working in NL as a: paid by the hour, working predominately on client site consultant, is as the PAYE employee of 'somebody'. The rules may be different if you are (genuinely) paid by piece or if you do most of the work at home.

Of course, you can always work in a different way using the "getting away with it rule", but as NL Tax law puts the risk of you doing this squarely with the client, few clients will let you.

As a non Dutch citizen you can usually claim the 30% rule against your NL income.

Hyper, I think that the answer is the same.

In Germany the situation is different. It is an employment protection rule that stops you working in this way and the rule is that a company may not subcontract staff to another company on a: working on site, paid by the hour basis unless they have a 'labour leasing license'. You cannot get a labour leasing license unless you have a number X employees (I think X is 30). I think that breaking this rule could result in criminal sanctions to the directors of the company.

I know that there are an awful lot of people working in Germany breaking this rule, using questional techniques to get around it. Frankly there is no need, working as German Sole Trader is easy enough to arrange and perfectly legal.

tim

[hyperD]

There is no Ltd route in the Netherlands. One man service companies are Verboten (as they are in Germany).

tim

Tim,

I have several concurrent clients in the UK with work carried out under purchase orders, contracts and NDAs. I subcontract any work that I cannot take on board myself without requiring clients permission. All my clients have my Ltd registered as a preferred supplier.

If I were to win some business in the Netherlands, would they consider it Ltd B2B or would they considering having no employees as an immediate status of PSC?

[mcquiggd]

There is no Ltd route in the Netherlands. One man service companies are Verboten (as they are in Germany).

tim

Whats the preferred alternative to a Ltd...? Any advice welcome...

[tim123]

It's only a short gig, at least initially, so I will prefer to use an Umbrella rather than go the limited route, unless there is a renewal... any advice on companies / the preferred approach by both contractors and clients....?

Also, anyone who has worked in Amsterdam have advice on reasonable (non sleazy, chaps ) accomodation..?

There is no Ltd route in the Netherlands. One man service companies are Verboten (as they are in Germany).

tim

[mcquiggd]

Nope it's a role I originally discussed with the client a year ago... someone else took it after I turned it down, and he is now off to New Zealand. Seems a fair time to move... reasonable salary, but I am in the enviable position of having a landlord as contractor who, after my initial 6 month lease, is happy to let on a monthly basis, and a previous client back here who is interested as well. So I can keep the flat here for a month or so, check out the role in Amsterdam, and take it from there....