Reply to: Contracting in Europe - is it worth it?

[lecyclist]

Unless one wants to go to contract in Europe for the sake of the experience, I think its really not worth it !

(*not that I would go permie again lol)

Everyone who finds it works for them disagrees with you. What was the question again

[fxc]

the issue is that unpaid tax bills can be pursued by the countries revenue service with the agency being liable now, therefore the agency (if they know what the law is) should insist that you pay tax in country to avoid this liability.

This is debatable based on the 183 day rule, problem for the agency being that if they allow you to work say 182 days in Germany while paying UK tax, then you finish your contract, in theory that is fine. However, should you then get another contract in Germany and exceed the 183 days in country in the same calendar year, then the agency that first placed you is liable for the tax in the first 182 days, if you dont pay it. Given you will likely have paid the tax in the UK by the time this issue surfaces, the agency are left holding the baby/ bill.

You can't blame them for sensible compliance. The ire should be really directed at the law, which in the case here, is something of an ass.

Agencies also now on the hook for tax liability in the PS IR35 tulip storm, liability without responsibility for employment status is a ludicrous state of affairs, where the result will be a blanket ban as the risk simply cannot be considered.

[europetractor]

its not worth it working in europe now
Switzerland 30% tax
rest of europe 35% tax
its better to work on a low paying contract in uk

Plus British will soon have visas for europe .. that is a total show stopper for contracting ...

[Andy2]

its not worth it working in europe now
Switzerland 30% tax
rest of europe 35% tax
its better to work on a low paying contract in uk

[Brussels Slumdog]

I guess working in europe is a grey area for most contractors
There are several factors that I take into consideration.
1 Double tax agreement and how world wide income is taxed and residency rules.Understand the difference between regression with retention ie Belgium and tax credit ie UK.
2 Employer social security rates
3 Employee social security rates
4 Tax rates depending on how long the contract is. How much do you need to earn before paying tax.
I had a contract one year in the UK from Feb to Sept ie 11000 tax free to April and another 11000 from april.
5 Allowable expenses. The UK is now a problem.

[LondonManc]

I'd say don't do it, it turns you into scooterscot. He's a well balanced chap, big chip on each shoulder.

[SandyD]

I got a call today regarding working in Europe, they mentioned the B2B model of working, so there is hope !

[SueEllen]

Well I remember my agecies sending me accounting booklet where it said if you travel back to the UK most weekends then you can claim you are not resident and pay UK tax, it was in black and white all in an accounting advise handed to contractors.

And if an agency said the sky was green you would believe them.

As Stek said there was never any choice where you paid tax it was just various taxmen were slow in figuring out the change in how workers are engaged.

[SandyD]

There was never any choice if where to pay tax, just it was easier to defraud the local tax regime a few years ago through ignorance of EU rules. Now they are more or less on the ball and go back for previous abusers, witness the German taxman cometh thread on here.

Well I remember my agecies sending me accounting booklet where it said if you travel back to the UK most weekends then you can claim you are not resident and pay UK tax, it was in black and white all in an accounting advise handed to contractors.

[stek]

Well I tried in Amsterdam, Switzerland and Germany, even if you get paid through your limited you are expected to pay tax for that country from the start, in the past you had a choice to pay tax either in the country you work in or the country you reside in (UK) as long as you come back to the UK a few weekends a month, but nowadays you have to get a social security and and work through umbrella like, some offer you like 70% of your income - 30% deductions to tax etc but others cut a lot more following the tax system in that European country...

But if others have different experiences please share, perhaps like one says the agencies I spoke with were trying it on?

I remember at the start of this century around 2000 lots of contractors here were working in Europe.

There was never any choice if where to pay tax, just it was easier to defraud the local tax regime a few years ago through ignorance of EU rules. Now they are more or less on the ball and go back for previous abusers, witness the German taxman cometh thread on here.

[stek]

In Swiss particularly, you are always given the local route, local umbrella etc. You'd have to be really really special to be able to pull own LTD contract in Swiss.

Where is this country called Swiss?

[europetractor]

Also news to me, but haven't done it for a couple of years.

If you do go the umbrella route, there's some fun tricks they like to pull - like technically taking you on via a Swiss company (outside EU but access to SM). Can work out quite well, as you'll pay income tax in country but Swiss social security (which isn't as onerous as others). Can also turn out to be total tulip when the Swiss company goes down the pan and runs off with your tax deductions, that you are 'legally obligated' (you're not) to hand over to them, for 'safe keeping' until you declare your income for the tax year.

Watch the bastards closely. They know you don't know the law at all. Much, much better to go via Ltd if you can.

In Swiss particularly, you are always given the local route, local umbrella etc. You'd have to be really really special to be able to pull own LTD contract in Swiss.

[Xiathorn]

Also news to me, but haven't done it for a couple of years.

If you do go the umbrella route, there's some fun tricks they like to pull - like technically taking you on via a Swiss company (outside EU but access to SM). Can work out quite well, as you'll pay income tax in country but Swiss social security (which isn't as onerous as others). Can also turn out to be total tulip when the Swiss company goes down the pan and runs off with your tax deductions, that you are 'legally obligated' (you're not) to hand over to them, for 'safe keeping' until you declare your income for the tax year.

Watch the bastards closely. They know you don't know the law at all. Much, much better to go via Ltd if you can.

[SandyD]

Extinct? Officially dead? Keep going you two lol.

Haha.. didn't say that myself, I said it wasn't financially worth it for UK based contractors to contract in Europe like it used to be before, its worth it for the experience, either to put something new on your CV you can't get in the UK, or just to experience working in a different country... but if one's aim to maximize earnings, then staying in the UK makes best sense.

Oh I also noticed other overseas packages e.g. to Singapore are no longer as tempting as it used to be.

[northernladuk]

Extinct? Officially dead? Keep going you two lol.