working remotely for London company from Germany?

[jamesbrown]

An update: the prospective client sounds favourable but has suggested that I fly over to them in London from time to time to confer. The question is: if any of the work is performed on English soil, could HMRC conceivably start to take an interest? What if the client insists on paying into a UK bank account? And in pounds rather than Euros? What if the client misreports things to Hector?

In other words, is there anything I should specifically watch out for, and refuse to accept, in order to avoid the spectre of double taxation?

There is no "spectre" of double taxation. You're personally taxed where you're resident (companies can be a little trickier) and the treaties are designed to avoid double taxation. If anything, there's a spectre of double "non taxation" in recent times, but I digress...

Anyway, the key here is whether you will meet the requirements for non-residency in the UK and you should pay very close attention to those. In general, there shouldn't be issues, but the rules are much tighter since April 2013, so you'll have to familiarize yourself with them. Why would the client insist on paying into a UK bank account?? If the client insists on dealing with a UK Ltd., that's a different matter, and one of the things I was skeptical about above.

[darrenb]

An update: the prospective client sounds favourable but has suggested that I fly over to them in London from time to time to confer. The question is: if any of the work is performed on English soil, could HMRC conceivably start to take an interest? What if the client insists on paying into a UK bank account? And in pounds rather than Euros? What if the client misreports things to Hector?

In other words, is there anything I should specifically watch out for, and refuse to accept, in order to avoid the spectre of double taxation?

[jamesbrown]

Thanks, some great advice here. I'm beginning to think more and more contracting is going to go remote -- not least due to the economic upheavals in the UK, US, etc.

One issue though with transnational contracting. What happens if you get a bad client, a client that is in financial difficulties you don't know about, or one that simply decides to welch and see if they can get away with it? What have you got to fall back on ultimately? It's got to be tough if you can't show up in Small Claims Court or a Las Vegas courtroom or whatever.

The contract will state the jurisdiction. There are tried-and-tested methods to pursue clients that delay payment, although the specifics of what you can do vary by jurisdiction. Realistically, though, if a loss is actually incurred, it rarely makes sense to pursue it legally, regardless of the jurisdiction (a risk that distinguishes contractors from permies), so do what you can upfront in terms of credit checks etc. and during the contract (looking for patterns, minimizing risk) and just hope you get relatively few of them.

[darrenb]

Thanks, some great advice here. I'm beginning to think more and more contracting is going to go remote -- not least due to the economic upheavals in the UK, US, etc.

One issue though with transnational contracting. What happens if you get a bad client, a client that is in financial difficulties you don't know about, or one that simply decides to welch and see if they can get away with it? What have you got to fall back on ultimately? It's got to be tough if you can't show up in Small Claims Court or a Las Vegas courtroom or whatever.

[darmstadt]

Although not UK but USA, I did a 2 year stint and a 7 year stint doing work for an American firm while based here (in DE) and all I did was send them an invoice, in $, and it was paid into my account (except for one project where the payment was a cheque on a Las Vegas bank, which I just paid into my account as normal.) Paperwork is passed onto my Steuerberater and she just dealt with it all for me and never had any problems. I also used to put in various invoices and receipts in other currencies as I worked the whole EMEA spectrum and all was okay. UK companies though were always a bit of a problem as they couldn't get their heads around the way contractors work here.

[jamesbrown]

In which case they will need educating.

You can surely try Since it's a start-up, it may be straightforward....

[scooterscot]

Thanks, that sounds like good news. Still a bit of an impedance mismatch though: not sure whether to give them a quote in Euros vs pounds, hourly rate vs daily rate. And the fact that we don't need a company structure in Germany could be confusing to them.

Depends on the length of the job.

I took on a retainer for 12 months, the client were very keen to use pounds, I was not. So they want something I don't, that means bargaining. So I told them if they would like me to charge pounds over this period the rate is this XXA rather than XXB in euros.

In the end they'd rather pay me more. I made that arrangement when the €/£ was around 1.25, now it's 1.16, so I'm still profiting from the arrangement. But that's one way to play it. Others might have a different approach.

[doodab]

It may not be an obstacle in Germany. However, you're dealing with a UK company, and I'd expect it could be an obstacle to them (off-payroll, invoicing as a "self-employed" individual).....

In which case they will need educating.

[scooterscot]

You send them an invoice, they pay it the way they pay any other employer. You don't need a company, or to be employed, because you are self employed and in Germany that isn't an issue the way it is here.

WHS -

I have a client in the UK also, I invoice them as an individual with my Deutsch vat number

[jamesbrown]

Thanks, that sounds like good news. Still a bit of an impedance mismatch though: not sure whether to give them a quote in Euros vs pounds, hourly rate vs daily rate. And the fact that we don't need a company structure in Germany could be confusing to them.

It may not be an obstacle in Germany. However, you're dealing with a UK company, and I'd expect it could be an obstacle to them (off-payroll, invoicing as a "self-employed" individual).....

[darrenb]

You send them an invoice, they pay it the way they pay any other employer. You don't need a company, or to be employed, because you are self employed and in Germany that isn't an issue the way it is here.

Thanks, that sounds like good news. Still a bit of an impedance mismatch though: not sure whether to give them a quote in Euros vs pounds, hourly rate vs daily rate. And the fact that we don't need a company structure in Germany could be confusing to them.

[doodab]

You send them an invoice, they pay it the way they pay any other employer. You don't need a company, or to be employed, because you are self employed and in Germany that isn't an issue the way it is here.

[jamesbrown]

If you're registered and paying taxes in Germany and don't plan to open a company in the UK or plan to become personally resident in the UK, I don't foresee any questions of residency or taxation in the UK (foreign companies invoice other foreign companies routinely, it's what companies do...). You'll just pay taxes in Germany, as usual. However, I'm not sure how German freelancers operate, but you seem to imply that it is not with a company structure. Unless you have a German company that can invoice the London client, I think this will be a non-starter. The company in London isn't going to take you on as a non-resident employee on their ordinary payroll (where tax is taken at source)....

[darrenb]

I live in Germany, but it's been suggested that I work remotely for a London startup. I was wondering if anybody else has tried this, and which tax regime you fall under? I long ago abandoned the Ltd, and would rather stay as a German freelancer, but I'm not sure if the company and/or HMRC would accept this?

The problem I have is that in my specialty there's not much going on in Germany but a lot going on in London and California. But Germany is definitely a better place for me to live.

So any tips about working remotely from abroad would be much appreciated.