Reply to: Belgium

[skubidoo]

Hi,

I'm in the same boat now. Can you advise? What did you end up doing?

Cheers.

When life serves up lemons, make lemonade. In this spirit, as our proud national currency circles the plughole I am about to take up a contract in Belgium, which is now worth about 20% more than when I negotiated the day rate, that being the amount by which the £ has declined relative to the € in the interim.

The downside, of course, is the layers of EU bureaucracy which seem designed explicitly to make such labour mobility unattractive, and I wondered if any readers have been there, done that? Specialist knowledge of the minefield of employment laws, taxation arrangements, VAT and incorporation rules seems thin on the ground, and usually provided by some shyster who wishes to sell one a payroll management scheme of dubious legality.

A currently nebulous plan is coming together to trade thru my UK Ltd Co, for the first 6 months, then become 'tax resident' in Belgium and either become Belgian and self-employed for tax purposes, which apparently means I have to eat chips with mayonnaise and pay 50% tax or else investigate one of the aforementioned umbrella or payroll schemes ....

Anyone got any tips, anecdotes or valuable experience? I should make it clear that I am not interested in any scheme that involves payments to offshore or 'private' bank accounts unknown to the HMRC, double taxation treaty abuse, or anything not totally compliant with the relevant legislation; a simple point that seems to gobsmack some of the salespeople I have been dealing with ....

C.

[Rantor]

When I compared ITECS to other companies there wasn't much difference. I don't think ITECS is any worse than others. If you have a low tax bill you have to question how legal this is. I could imagine that if you set yourself up as self employed this coiuld be much better.

Not in belgoland - you might keep 45% if you were clever with your expenses. The killer is the employer/employee social taxes. 'Real' self-employement (equiv to sole trader?) is the worst tax status hence most self-employed use their own ltd co and this is not readily accessible or attractive to buitenlanders (same qualification restrictions plus 7k capitalisation plus 1.5k fees.)

This is why the mgmt companies have a ready-made market.

[BlasterBates]

When I compared ITECS to other companies there wasn't much difference. I don't think ITECS is any worse than others. If you have a low tax bill you have to question how legal this is. I could imagine that if you set yourself up as self employed this coiuld be much better.

[Rantor]

I was with ITECS, their rep said words to the effect of "for adventurous clients we offer an offshore solution" and sort of sniggered as if he was offering me cocaine, I opted for the legal solution.

All these managment companies will offer to put money in an offshore account if you want them to. That is why I strongly advise using an independent advisor first, and let him help you choose a solution.

A chap I'm working with is using ITECS at the moment and the fees are very high. He is using a payroll type system (non-EU) and I think his net retention is something like 42% i.e. he 'loses' 58% in taxes and fees

[BlasterBates]

I was with ITECS, their rep said words to the effect of "for adventurous clients we offer an offshore solution" and sort of sniggered as if he was offering me cocaine, I opted for the legal solution.

All these managment companies will offer to put money in an offshore account if you want them to. That is why I strongly advise using an independent advisor first, and let him help you choose a solution.

[expat]

...Anyone had firsthand experience of companies named ITECS, Pearl or Professional and Business Plus (PBP Group)?....

Not quite, but I did call ITECS for info once. They insisted on reading out to me the advantages of their offshore scheme, provided that I would be non-resident in the UK during the contract, even when I told them that I would remain UK-resident and that in any case I was not interested in any such scheme.

This suggested to me that:
1. the offshore scheme was probably the attractive part of their "solution", without it I might not like it.
2. they weren't interested in listening to what I wanted to say.
3. I probably didn't want to go with them.

This is all just an impression though; maybe I got a trainee sales person on the phone. It was moot, I didn't take the contract anyway.

[pjclarke]

I really appreciate all the responses, especially from those who have walked the walk. Their varied nature, I would suggest, underscore that my use of the word 'minefield' was apposite. Anyone had firsthand experience of companies named ITECS, Pearl or Professional and Business Plus (PBP Group)?

To answer the specific question, the initial contract is for 3 months, I'd be very surprised if it is not extended for at least another six, ultimately I expect to be in BE for a minimum of 1 year, as far as one can forecast these things.

[BlasterBates]

I do mean a local Belgian advisor, who you put on the tax form, and make sure everything is accounted for. That way you're covered. If there is any "hidden" income from him obviously you foot the bill. That seems how it works. Anything not declared in some way, is generally illegal. In my experience tax free pension contributions are always declared on tax forms.

[Jubber]

How long is the actual contract? Not maybe - but how long have you signed for?

[BlasterBates]

The various mgmt companyAssuming you get this sorted out, the mgmt co option basically supports an income split with the stuff retained in Luxembourg, or wherever, being kept for a pension. This is legal but the obvious follow-on is a tad more grey shading to black after a few years. They are tightening up on this type of scheme, mainly by challenging tax returns without declared interest.

If this legal then you can declare it to the Belgium authorities, without impunity.

I suspect however were you to suggest this that your management company would throw an apoplectic fit.

This scheme has been running for years in Germany and was "perfectly legit"

Until:

a German accountant was arrested

If this is declared to the authorities in some way, then it sounds like it maybe legit. However, why Luxembourg where the Belgian authorities can't find out about it?

My advice is go to an independent Belgian tax advisor or accountant and let him deal with your affairs.

[expat]

Worth considering a Dubai scheme a few guys here are using, plus many thousands of other.

Sigh. Why do they not believe you when you say that you don't want any of this?

[expat]

My advice would be simply go native now, it just simplifies things.

I'm not sure but I understand you can be "employed".

Now that's what I did in Luxembourg, however a lot of management companies do offer to syphon money abroad, which I rejected.

Usually you have the option to pay UK NI. This is not abuse of the double taxation treaty, and can potentially save you money as NI is generally more expensive elsewhere.

Absolutely (AIUI). It also gets you NICs which count for a UK oension. Don't knock it unless you're rich, when you get there it will be "every little helps".

But sometimes if you elect topay UK NI, that means that you pay a reduced but far from non-zero local NI/social contribution; and also that your primary health service is in the UK, with only emergency treatment locally.

[Wilmslow]

When life serves up lemons, make lemonade. In this spirit, as our proud national currency circles the plughole I am about to take up a contract in Belgium, which is now worth about 20% more than when I negotiated the day rate, that being the amount by which the £ has declined relative to the € in the interim.

The downside, of course, is the layers of EU bureaucracy which seem designed explicitly to make such labour mobility unattractive, and I wondered if any readers have been there, done that? Specialist knowledge of the minefield of employment laws, taxation arrangements, VAT and incorporation rules seems thin on the ground, and usually provided by some shyster who wishes to sell one a payroll management scheme of dubious legality.

A currently nebulous plan is coming together to trade thru my UK Ltd Co, for the first 6 months, then become 'tax resident' in Belgium and either become Belgian and self-employed for tax purposes, which apparently means I have to eat chips with mayonnaise and pay 50% tax or else investigate one of the aforementioned umbrella or payroll schemes ....

Anyone got any tips, anecdotes or valuable experience? I should make it clear that I am not interested in any scheme that involves payments to offshore or 'private' bank accounts unknown to the HMRC, double taxation treaty abuse, or anything not totally compliant with the relevant legislation; a simple point that seems to gobsmack some of the salespeople I have been dealing with ....

C.

Worth considering a Dubai scheme a few guys here are using, plus many thousands of other.

They have been investigated, and passed, which seems like a good thing....

[BlasterBates]

My advice would be simply go native now, it just simplifies things.

I'm not sure but I understand you can be "employed".

Now that's what I did in Luxembourg, however a lot of management companies do offer to syphon money abroad, which I rejected.

Usually you have the option to pay UK NI. This is not abuse of the double taxation treaty, and can potentially save you money as NI is generally more expensive elsewhere.

[expat]

...Specialist knowledge of the minefield of employment laws, taxation arrangements ... usually provided by some shyster who wishes to sell one a payroll management scheme of dubious legality.

I noticed that too! Everybody's assessment of the tax rules was different, and everybody's tended to lean in the direction that would imply that I should take their "solution".

... I am not interested in any scheme that involves payments to offshore or 'private' bank accounts unknown to the HMRC, double taxation treaty abuse, or anything not totally compliant with the relevant legislation; a simple point that seems to gobsmack some of the salespeople I have been dealing with ....

Yeah! I could not get it into their thick heads that what I wanted was to be legit, not dodge taxes.


I am afraid that I have done the usual CUK job of replying without having anything to say, except that I too am very interested. I would want:
1. to be legit and not attract unwelcome attention from anybody's Revenue.
2. to have admin taken care of by someone who knows what they are doing, in order to be squeaky-clean, but also maximise reasonably my take-home.
3. to have any social contributions/retirement/health service options clearly laid out (taxes per se are not usually up for discussion, but E111/EHIC, NICs, where you get full-range health care, etc usually are).
4. to pay a reasonable monthly fee for this, i.e. I engage a service for a few hundred a month, rather than becoming a local permie, or inserting an unnecessary agency in the chain with a 10% or more rake-off.