Reply to: UK Agency refusing to pay contract invoice for work carried out. Please help.

[Boo]

Wrong.

Doesn't apply to one-man companies since basically you are not posting an employee, you are posting an entire Company, effectively relocating a Ltd to the new EU State and liable for that State's tax from day one.

This is total nonsense : there is no way to "post an entire company" from one country to another. YourCo will be registered and trading in the UK throughout and there is nothing about a 6 month posting abroad for one of its employees which will change that.

You have been corrected by many people here and I really think you should take on board what I and others are saying on this thread regarding the 183 day rule, Stek.

Please stop misadvising people, it could cost someone a lot of cash and lot of worry...

PKB.

Boo

[Hilfort Contracting Prof]

Centre of living and non tax residence

Assuming the following:

- you are currently not tax resident in the Netherlands;
- you are understaying the 183 day rule;
- you are meeting the Dutch rules & regulations as stated in my previous post; and
- your centre of living is in the UK.

You will not become tax liable in the Netherlands even as a Director/Majority Shareholder (DMS) of your own company. The only thing that a lot of contractors are not aware of is that since July 2012 the WAADI registration became effective, this is also applicable to a DMS and you open yourself up to a potential fine of €12.000. So, I strongly suggest you register for this in the Netherlands. Registration can only happen via the Dutch Chamber of Commerce.

I hope this helps.

Kr,

Martijn
Hilfort

[stek]

That is correct. It is called the 183 day rule and is a treaty obligation that all the members of the EU have signed up for. Basically it says that if a company sends an employee to another EU country to work for less than 183 days then that employee is not subject to the tax regime in the destination country.

Before the pack of disguised agent, umbrella company employees and management company employees etc descends, this does apply to one man band Ltd Companys just as much as big multinationals.

Your agency doesn't have a leg to stand on and you should send them the overdue ivoice reminder letters before pursuing them through the courts if required.

Boo

Wrong.

Doesn't apply to one-man companies since basically you are not posting an employee, you are posting an entire Company, effectively relocating a Ltd to the new EU State and liable for that State's tax from day one.

Please stop misadvising people, it could cost someone a lot of cash and lot of worry...

[Boo]

Netherlands - income tax on employees - Your Europe

Not resident in the Netherlands? You only pay tax on income earned there.

Except for that income earned in the Netherlands through a company in another EU country which is covered by the 183 day exemption.

The website doesn't say that but that is the case.

Boo

[Boo]

Are you saying that is you work in the NL through your UK LTD for under 183 days, you do not need to pay NL taxes?

That is correct. It is called the 183 day rule and is a treaty obligation that all the members of the EU have signed up for. Basically it says that if a company sends an employee to another EU country to work for less than 183 days then that employee is not subject to the tax regime in the destination country.

Before the pack of disguised agent, umbrella company employees and management company employees etc descends, this does apply to one man band Ltd Companys just as much as big multinationals.

Your agency doesn't have a leg to stand on and you should send them the overdue ivoice reminder letters before pursuing them through the courts if required.

Boo

[Hilfort Contracting Prof]

Contracting in the Netherlands

Dear Gene,

It is absolutely fine to contract in the Netherlands for 6 months via your own Ltd. without there having to be any problems as long as you follow the compliance rules & regulations that apply in the Netherlands. This will then avoid any potential Chain Liability for the agency and the client. Compliance requirements are:
[*]VAR approval[*]A1[*]Schedule with proof your are not oversatying 183 day rule during tax & calendar year (these are the same in the NL)[*]Proof of UK NI contributions & local taxes[*]Waadi registration

Once the compliance rules & regulations have been met and you haven't become tax liable in the Netherlands (understaying 183 day rule), there shouldn't be any reason for the agency to without payment.

I hope this helps.
Good luck!

Kind regards,

Martijn Verheijen
Hilfort Contracting Professionals

Dear All,

The situation:

1. my LTD company had a contract for 6 months with a UK agency to carry out work in the Netherlands

2. All contracts submitted and signed were between the recruitment agency's UK limited company and my UK limited company

3. Upon submission of my final months invoice the recruitment agency demanded to see my proof of paying dutch taxes before releasing payment

4. From doing my research I spoke to their contracts division and mentioned that as an employment agency business they should have put me on their payroll and organised me to contract under a dutch umbrella.

5. I have since then, submitted my companies returns and paid UK taxes on the invoices submitted to the agency.

As things stand the agency owes me 4000euro which they are not paying unless I instruct them to put me under a backdated payroll for 6 months, credit them all my invoices and for their payroll company to pay me under dutch tax laws.

Can someone advise me if this is allowed? I'm extremely confused and would appreciate any feedback on the above.

Gene

[tarbera]

Indeed

Netherlands - income tax on employees - Your Europe

Not resident in the Netherlands? You only pay tax on income earned there.

So you MUST pay Dutch employment tax retrospectively for the 183 days. A UK limited company does not help or isolate you from that liability.

AFAIK, the employer (agency or end client) can be held liable for employing you illegally.

I would either see a Dutch accountant and try to sort the mess out, or do a runner.

Indeed you need to pay dutch tax from day 1.

I Remember years ago we had a few RBS Amsterdam jonnys working via a UK agency paid via UK Limited company, travelling in on a Monday morning home on a Friday Night. All was great for months until they got stopped at the airport and asked for there Sofi number as they were in Amsterdam every week. (we pressume a yokal dobbed them in)

Several hours later 50 tax inpectors turned up at RBS, Blocked all the exits and got everyone in the bulidings details. (inculding all the ABN AMRO people that were sharing the building)

upshot

125 people got lubed up and had to stump up the tax from RBS (0 from ABN AMRO), RBS got a big fine and thats why RBS are now really strick and insists working via a payrollers for UK contractors in Amsterdam

[jezosaurus]

Are you saying that is you work in the NL through your UK LTD for under 183 days, you do not need to pay NL taxes?

Thanks

Netherlands - income tax on employees - Your Europe

Not resident in the Netherlands? You only pay tax on income earned there.

So you MUST pay Dutch employment tax retrospectively for the 183 days. A UK limited company does not help or isolate you from that liability.

AFAIK, the employer (agency or end client) can be held liable for employing you illegally.

I would either see a Dutch accountant and try to sort the mess out, or do a runner.

[Gene Woodman]

I did a few short gigs, well under 6 months, all through my UK Ltd, did 0 non-UK paperwork, to my knowledge and belief I didn't fall foul of any double-taxation treaties.
I really don't understand why you should pay NL tax for a 6-months role, surely including the weekends etc you were there less than 183 days?

Are you saying that is you work in the NL through your UK LTD for under 183 days, you do not need to pay NL taxes?

Thanks

[yasockie]

The more I read on here it seems that contracting in Europe is a mine field which is more hassle than it's worth!

I did a few short gigs, well under 6 months, all through my UK Ltd, did 0 non-UK paperwork, to my knowledge and belief I didn't fall foul of any double-taxation treaties.
I really don't understand why you should pay NL tax for a 6-months role, surely including the weekends etc you were there less than 183 days?

[Kanye]

The more I read on here it seems that contracting in Europe is a mine field which is more hassle than it's worth!

[SueEllen]

But the gospel according to Boo says you're ok for 183 days paying UK tax, this proves that approach is nonsense.

I've met contractors who are one-man bands who think this.

Unfortunately they haven't realised that not all contractors are one-man bands and the difference between personal and company taxes.

[stek]

But the gospel according to Boo says you're ok for 183 days paying UK tax, this proves that approach is nonsense.

[SueEllen]

Some contracts have a clause in them that if you don't or found not to have paid your taxes the agency can recover the money from you, and you are liable for any extra costs the agency incurs.

I suggest you read your contract properly as lots of contractors are unaware that their contract has a clause like this.

Also the fact the contract may say HMRC doesn't mean the agency won't co-operate with any other countries' taxman.

Edited to say: It's perfectly legal to give someone a contract bound by the terms of another EU countries' law even though the tax and VAT regimes the contract falls under are all completely different. This is what happens when you do cross-border business.

[tarbera]

They should have yes

Should they not have put me on their payroll initially? I thought this was law? Why would they give me a UK contract if they want me to pay Dutch taxes and not UK taxes?

But dont think you will have a leg to stand on with the Dutch taxman he will want paid from you for you breaking dutch laws.

If you hand back all your invoices back, you will end up with about 50% (no 30% ruling or sofi number i take it) net pay - with No UK taxes due.