Reply to: Contract in the Netherlands (The Hague)

[CloudySolutions]

Working in the Netherlands with your UK limited Company!

I read this thread and found all the comments very interesting and just wondered if anyone has spoken to a Dutch corporate Immigration Lawyer. If they had spoken to a Dutch corporate Immigration layer they would have found out that cross-border services allow UK limited companies to send its employees to work in the Netherlands without the requirement for work permits, visas, and any additional tax burdens.

This applies to non-eu passport holders who also live and work in the UK for the UK company. This vehicle was put in place by the European cour of justice after the 1996 Vander Elst ruling, now termed cross-border services.

I have worked in Holland for several companies based on cross-border services with my UK limited company sending my employees including myself to work the contracts.

If you have a UK limited company why would you need to use any other form of employment to work with other EU member state companies?

I would suggest seeking professional legal advice on these matters because you could get yourselves in a world of trouble listening to pub gossip.

Cloudy

Hi all,

Looking for some advice - I usually work in the UK but I have been offered a contract in the Hague - The Netherlands from a Dutch agency. My usual rates in London are between 450-400.

I have been offered €563 Euros a day (€70.60 per day) for 3 to 6 months in the Hague, but they mentioned that I need to work through a payroll construction as they pay hourly and not daily. They are not covering my expenses. They have agreed that I can work half the week in London and half in The Netherlands.

My question is, how will this affect my limited company in the UK, would it sit as 'not trading' during my period working in the Netherlands? Would I have to pay any UK taxes at all as half my time I will be in the Netherlands and half in UK.

Would the payroll construction company take into account all of my taxes and expenses? I will be working 2 days in the Hague and 3 in London so I will be travelling from London to the Hague once a week and also 2 days accommodation there also.

One of my concerns is what my actual take home pay will be working in the Netherlands and using a 'payroll construction' Is there an umbrella company or tax calculator you can recommend?

Many thank in advance.

[Eirikur]

Please do advise further - what would my actual take home pay be then? They have allowed me to use my limited company in the UK as majority about 95% will be spent working in the UK. It is the dutch agency who are paying me though. What is the likely payment after they take off tax?

Many thanks

you could ask the agency for an exact number or some random people on the internet

[ChristyP]

Say again ??

They are paying you 563 Euro per day into your limited company bank account without withholding any tax ?


No they won’t - they might tell you this now

Ask to get paid weekly so you can get confirmation after a week and not a sob story in 6 weeks time


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Please do advise further - what would my actual take home pay be then? They have allowed me to use my limited company in the UK as majority about 95% will be spent working in the UK. It is the dutch agency who are paying me though. What is the likely payment after they take off tax?

Many thanks

[GhostofTarbera]

They are paying 563 Euros not including any tax.

Say again ??

They are paying you 563 Euro per day into your limited company bank account without withholding any tax ?


No they won’t - they might tell you this now

Ask to get paid weekly so you can get confirmation after a week and not a sob story in 6 weeks time


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[ChristyP]

And they are going to pay you gross ?


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They are paying 563 Euros not including any tax.

[GhostofTarbera]

So the agency have been flexible and changed the terms of my contract. So now I will be working 90-95% in the UK and the remainder maybe a few times a month I would travel to the Netherlands office.

I will be paid in Euros from a Dutch agency - should I be charging VAT as I am VAT registered in the UK.

Day rate is still 563 Euros. Would this arrangement of working 90% in UK makes things alot easier and would their be any changes to my usual invoicing procedure?

Many thanks!

And they are going to pay you gross ?


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[ChristyP]

So the agency have been flexible and changed the terms of my contract. So now I will be working 90-95% in the UK and the remainder maybe a few times a month I would travel to the Netherlands office.

I will be paid in Euros from a Dutch agency - should I be charging VAT as I am VAT registered in the UK.

Day rate is still 563 Euros. Would this arrangement of working 90% in UK makes things alot easier and would their be any changes to my usual invoicing procedure?

Many thanks!

[GhostofTarbera]

Thanks for the advice guys - it seems that its not worth it at all. Im taken aback by what I will be left with after taxes, expesnes etc. Plus the agent isnt willing to provide 2 separate contracts. Seems too complex and not worth the bother.

After April next year, will be more or less the same amount you get if IR35 caught in UK


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[ChristyP]

Thanks for the advice guys - it seems that its not worth it at all. Im taken aback by what I will be left with after taxes, expesnes etc. Plus the agent isnt willing to provide 2 separate contracts. Seems too complex and not worth the bother.

[Sue B]

Just a quick note to basically agree with what has already been said.

We have a number of contractors who work both in the UK and overseas however they always have two contracts.

If this is acceptable to the client then it is reasonably straight forward as long as your accountant in the UK understand the correct application of Foreign Tax Credits, and ensuring that you can claim full foreign tax credits in the UK, by having a matching UK income tax liability. You cannot offset NL income tax paid against UK Dividend tax for instance.

I agree it is unlikely you would get the 30% ruling. That's not to say you cannot try, but the decision is the Dutch Tax Office and takes around 3 months to process. The criteria for successful application includes:- you to be employed in NL, with a specific skill set or expertise / experience that cannot be sourced in the Dutch Labour Market.

In the meantime reasonable commuting costs (lets say 20%, actual costs, receipts required) can be used as a deduction.

If we assumed all your work was done in NL then I would suggest, with an average amount of expenses at around 20%, and an A1 was in place you could expect in the region of €395 net per day from which you would then have to meet the commuting costs (20% = €112.60 per day) so true net after deducting all costs to earn that money, would be €282 approx per day.

[BlasterBates]

Agent will never agree to that in a million years (as end client is responsible under Dutch law and will not allow the agent to do so)


He will need to cover his expenses from his net salary from the agent

I presume he will be under the 30% rule, that will pay for some expenses


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Working at home isn't really a legal way to do this. You can't have an employment in one country and hop over the border and work at home.

I worked in Switzerland whilst being resident in Germany and one thing they did demand to know was what proportion of my time was spent in Switzerland and whether any work was done in Germany.

HMRC might or might not enquire, I presume more likely not, but if they do, that is where is becomes difficult.

I did work in Luxembourg where they split my contract and a part of the contract was in the UK. This was actually to enable me to pay UK National Insurance but I had to keep proof of travel.

[sal]

Unless you are desperate or the role is spectacular I wouldn't bother at that rate, after expenses and taxes you are bound to end up much worse than £400-£450pd for a UK based outside IR35 contract. On top of all the headache of travel and juggling taxes in 2 countries.

Also thing to consider is, do you have EU passport? Despite all the reassurances on both sides who knows what will happen in 4 months

[GhostofTarbera]

You are going to be left with 1400ish net euros a week after tax and expenses


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[GhostofTarbera]

If you are going to work in the UK part of the time, then this should be taxed in both the UK and the Netherlands.

If HMRC were to send an enquiry about whether you worked exclusively or not in the Netherlands and you were not then they would follow up with a tax demand.

Just so you're aware.

What you should do is have two separate contracts, one for the Netherlands and one for the UK

I suspect the agency wouldn't agree but that doesn't mean it would be legal if you only had one contract.

It is complicated, but that is how it is. I would probably turn it down on those grounds.

Agent will never agree to that in a million years (as end client is responsible under Dutch law and will not allow the agent to do so)


He will need to cover his expenses from his net salary from the agent

I presume he will be under the 30% rule, that will pay for some expenses


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[BlasterBates]

If you are going to work in the UK part of the time, then this should be taxed in both the UK and the Netherlands.

If HMRC were to send an enquiry about whether you worked exclusively or not in the Netherlands and you were not then they would follow up with a tax demand.

Just so you're aware.

What you should do is have two separate contracts, one for the Netherlands and one for the UK

I suspect the agency wouldn't agree but that doesn't mean it would be legal if you only had one contract.

It is complicated, but that is how it is. I would probably turn it down on those grounds.