Reply to: Advice for taking contracts from non-UK companies

[jamesbrown]

Thanks everyone for the advice and comments. Oh I didn't realise that IR35 was still a thing for overseas clients.....that's just crazy.

Why? I mean, if you and the intermediary through which you work are UK tax payers, why wouldn't UK tax legislation apply? Likewise, to any other entity in the supply chain. In practice, it may be harder for an overseas client to assert the degree of D&C needed for a contract to be inside IR35, but the test remains the same. Note that Chapter 10 does not apply to clients with no UK presence.

[funkyContractorITUK]

Either way my contracts will be assessed by Kingsbridge and then its a case of me checking that in practice the contracts are inside/outside.

[funkyContractorITUK]

Thanks everyone for the advice and comments. Oh I didn't realise that IR35 was still a thing for overseas clients.....that's just crazy.

[jamesbrown]

Article today in the Torygraph on the massive UK/US disparity in nominal and real terms for most industries and professions:

https://www.telegraph.co.uk/money/co...uch-americans/

( Torygraph paywall was implemented by morons, so turn off javascript for that domain to access. )

[oliverson]

I'm working with a US client that has no presence here in the UK and tbh, it just fell into my lap. I certainly wouldn't expect to be able to build up a portfolio of US clients from the ground up.

As others have said, there are issues such as IR35 (old rules still apply), contract jurisdiction / insurances, exchange rate fluctuations, time zones, UK mortgage lenders, etc., but none of them have been an issue for me. In fact invoicing in USD and receiving payment in USD has been very favourable the last couple of years.

I think you'd be very lucky, as I was, to pursue this line, but it's not impossible.

[jamesbrown]

I got a sniff at a US contract paying $150/hour last year, but unfortunately did not get it. That rate has left me inspired to try and find some work for a US business. The main problem there is I don't have any useful contacts or understanding of how to find contracts in the US.

Yeah, you're unlikely to find gigs in the US without a solid list of contacts, but it's worth the investment in building them if you do have a niche skillset because US rates are in a different category to the UK or EU. That said, the market there is completely different than here - there's no mainstream use of agency contractors that you see in the UK. Mainstream skillsets are delivered by employees, but perm salaries are in a different league there too.

On mortgages, there are one or two lenders that will lend against USD or EUR T&M rates (e.g., Clydesdale, IIRC), but not many and generally not at the best rates, but there are others that will look at company profits, for example.

[Martin@AS Financial]

One of the big things I would say to consider is you will need to allow for currency fluctuations should the day rate be in say dollars or euros. From a mortgage point of view, there are not many banks that lend to clients that do not earn in sterling and most will take a haircut off your income.

Something else to consider is whether the client will cover things like your travel and hotel bills should you be needed in the overseas office.

[willendure]

Currently working on a B2B contract with a Swedish company. There is no need to consider Swedish emplyment law or visas, since it is just one company purchasing something from another in a different country. The contract was written under UK law but pays in Euros, which I am ok with but there has been a small fluctuation in the exchange rate. In my case, the contract was written for the supply of fixed deliverables at a fixed cost. Occasionaly I have devliered late and had to put in a week or 2 of my own time to complete, out of an overall time frame of 6 months. But I like the autonomy and all of this makes a strong case for it being outside of IR35, should I ever have to make that argument.

I got a sniff at a US contract paying $150/hour last year, but unfortunately did not get it. That rate has left me inspired to try and find some work for a US business. The main problem there is I don't have any useful contacts or understanding of how to find contracts in the US.

Yes, niche skills otherwise the client does not need to look further afield. But you can have niche skills that sit within a portfolio of more mainstream skills too, to avoid the risk of being forever pigeon holed as only capable of working in some niche area.

As others have said, hard to generalise since every situation will be slightly different, but I thought I would share my experience as a positive one.

[jamesbrown]

I'd be looking to work remotely from my office in the UK.

Thanks for the tips so far. I'll take a look into how much business insurance is etc.

Currently, I'm looking into other contracts in EU mostly because of timezone differences.

In that case, you don't need to be concerned with work permits/visas, but you do need to be concerned w/ IR35 (as usual).

That said, as eek suggests, you need to have a niche skillset (in which case timezone won't be an issue) and a solid list of contacts to find overseas clients consistently. You may get lucky once or twice, but most clients will not look overseas unless they need a specialist skillset or they're looking to save money on a commoditized skillset, and they won't be looking at the UK for the latter. I doubt there's a market in between these extremes that isn't easily satisfied with local suppliers. Having gone down this route myself, I'm not sure I'd recommend it. Developing a niche skillset is high risk, especially if it's related to a particular framework/methodology/software stack, rather than an academic skill (e.g., a niche branch of engineering). For large clients, you'll probably need to team with local SMEs to bid on work because the legal/compliance of large clients generally tell procurement to sod off when attempting to engage tiny foreign suppliers

[eek]

northernladuk I haven't travelled to far down the road just yet but I don't want to be caught with my pants down if a company calls me up from outside UK and they don't have branches in the UK and they would like to use my services. I'd like to confidently say things I have in place to be able to work with them.

Unless you are especially skilled in a niche area it’s not going go happen

[funkyContractorITUK]

northernladuk I haven't travelled to far down the road just yet but I don't want to be caught with my pants down if a company calls me up from outside UK and they don't have branches in the UK and they would like to use my services. I'd like to confidently say things I have in place to be able to work with them.

[funkyContractorITUK]

I'd be looking to work remotely from my office in the UK.

Thanks for the tips so far. I'll take a look into how much business insurance is etc.

Currently, I'm looking into other contracts in EU mostly because of timezone differences.

[northernladuk]

Are you just wondering or have you made any serious inroads in to this? Looks like just a flight of fantasy from what you've put there as your questions are almost impossible to answer as it will depend where the work is.

How far down this path are you past wondering?

[jamesbrown]

Where are you actually intending to do this work?

[jamesbrown]

Work permits and visas are only required for non-incidental or productive work actually performed in other countries, not for contracts delivered from the UK to clients in other countries. You need business insurance that covers it, particularly if North America. You need some understanding of how to negotiate with overseas clients, including contractual terms (preferably, UK jurisdiction and governing law) and rates/currency (preferably GBP). It isn't that complicated - the hardest part is building the contacts to get the work. Chapter 8 and Chapter 10 IR35 apply as normal, meaning that if Chapter 10 doesn't apply (e.g., because there is no UK entity in the supply chain), then Chapter 8 does apply. In other words, it is not a vehicle to "not worry about IR35".