Working from home on overseas contract, no agency

[QueenElizabeth]

You didn't actually say any of your work was being exported. You just said you worked directly for a US company. That doesn't stop you providing services to a third party in the UK via the US company.

Ah, I see. No, nothing remains in the UK and no aspect of the project requires me to be located here, in the US, or anywhere. Well, somewhere.

I am curious why you are in the UK if you are working for a US company directly, why not go and work in the US?

Working for a US company doesn't give me the legal right to work in the US.

[slackbloke]

I don't see the difference between the tax-free goods you can buy in the airport if you are leaving the country, and services that are 'produced' here but the results of which are being exported and used and rehashed in another country long before they come back here - if ever. The client's lawyers have stated they don't have to pay VAT, Norla checked with their accountants and agreed they were exempt, everyone is happy.

You didn't actually say any of your work was being exported. You just said you worked directly for a US company. That doesn't stop you providing services to a third party in the UK via the US company.
I am curious why you are in the UK if you are working for a US company directly, why not go and work in the US?

[QueenElizabeth]

No, not nonsense. Presumably when you say 'stuff' you mean goods? I am not talking about goods, I am talking about services and those services have taken place solely in the UK.

I don't see the difference between the tax-free goods you can buy in the airport if you are leaving the country, and services that are 'produced' here but the results of which are being exported and used and rehashed in another country long before they come back here - if ever. The client's lawyers have stated they don't have to pay VAT, Norla checked with their accountants and agreed they were exempt, everyone is happy.

[NotAllThere]

Also services.

[slackbloke]

Nonsense. I've bought stuff online from UK companies, and they price I pay is exclusive of VAT.

No, not nonsense. Presumably when you say 'stuff' you mean goods? I am not talking about goods, I am talking about services and those services have taken place solely in the UK.

[NotAllThere]

I am happy for someone to demonstrate otherwise, but I don't think that is correct. You are working in the UK and therefore the place of supply is the UK. ...

Nonsense. I've bought stuff online from UK companies, and they price I pay is exclusive of VAT.

[slackbloke]

Norla invoices them, takes off 40% and deposits the rest in my account. I was told that VAT is not required to be paid if the company being billed has no UK presence, ie. not a registered uk company, has no UK mailing address. This is the case, and afaik they are not paying VAT.

I am happy for someone to demonstrate otherwise, but I don't think that is correct. You are working in the UK and therefore the place of supply is the UK.
VAT has nothing to do with the company being billed, it is to do with the company performing the service and that is you, in the UK.

[QueenElizabeth]

With a ltd co, you can take dividends out of the profit, which is only subject to income tax, not NI.

You can still only claim real business expenses.

Ah, so that is where the savings are. I gather the NI employer contribution I am being stuck for is 11.5%, and the employee contribution I pay is is 4%. I sure would like to keep that 15.5%.

As it is, it is almost not worth my while to continue. Wish I knew how much umbella companies sucked before I signed the contract.

[QueenElizabeth]

How are they paying you? Are you or Norla invoicing them? They have to pay VAT

Norla invoices them, takes off 40% and deposits the rest in my account. I was told that VAT is not required to be paid if the company being billed has no UK presence, ie. not a registered uk company, has no UK mailing address. This is the case, and afaik they are not paying VAT.

[NotAllThere]

...Is there anything I can do? What sort of takehome can I expect from my own plc?

With a ltd co, you can take dividends out of the profit, which is only subject to income tax, not NI.

You can still only claim real business expenses.

[slackbloke]

I'm pretty new to the UK. I've been working a contract for a US company for a couple of months. They initially wanted me to fill out a us govt form which would classify me as an offshore employee and they would deduct 30% from my pay before depositing in my uk account. I imagined this would work to my disadvantage so instead I joined a local umbrella co (NorlaGroup) that was recommended by a friend (I was going to use Giant but they refuse to deal with offshore companies) and had them hash out a contract. The us company doesn't pay VAT.

Was shocked to get my first payslip, seeing Norla has withheld 40% for NI/Tax . Apparently I have no expenses i can claim, since i am working from home, and i have to pay the normal 11.5% employer NI contribution. This is not good, i have already lowballed my rate by accident.

I am seriously thinking of starting a limited company but the contract norla has with lasts for two more months.

Is there anything I can do? What sort of takehome can I expect from my own plc?

How are they paying you? Are you or Norla invoicing them? They have to pay VAT

[QueenElizabeth]

Well i found a relevant article in the accounting/contracts forum:

http://forums.contractoruk.com/accou...composite.html

But it uses figures from several years ago. As near as I can tell, in 2005 I could increase my takehome by around 10% by starting a plc.

[QueenElizabeth]

I'm pretty new to the UK. I've been working a contract for a US company for a couple of months. They initially wanted me to fill out a us govt form which would classify me as an offshore employee and they would deduct 30% from my pay before depositing in my uk account. I imagined this would work to my disadvantage so instead I joined a local umbrella co (NorlaGroup) that was recommended by a friend (I was going to use Giant but they refuse to deal with offshore companies) and had them hash out a contract. The us company doesn't pay VAT.

Was shocked to get my first payslip, seeing Norla has withheld 40% for NI/Tax . Apparently I have no expenses i can claim, since i am working from home, and i have to pay the normal 11.5% employer NI contribution. This is not good, i have already lowballed my rate by accident.

I am seriously thinking of starting a limited company but the contract norla has with lasts for two more months.

Is there anything I can do? What sort of takehome can I expect from my own plc?