Do I pay UK taxes when working remotely, from UK, for German company?

[ladymuck]

What if your client is UK, you're British but just fancy doing the WFH thing abroad for a bit - what then?

Pay in the UK and keep quiet

[PerfectStorm]

What if your client is UK, you're British but just fancy doing the WFH thing abroad for a bit - what then?

[Sue B]

Update: Dear All, thanks for your help. I did indeed receive an answer -- and a clear, definitive one - from Sue B . Thanks loads to her for her consummate expertise. With all errors or inaccuracies being mine - here is the answer:

When working for, say, a German company, 3 criteria - call them 'pins' - must be reckoned: (1) where you live during the contract - namely, your primary residence; (2) where - in what physical location - will you do the work; (3) where the site of your employment is physically located. These 3 pins yield 3 answers. If the majority - any 2 of the answers - are, 'UK', then you will pay taxes for this contract to the UK government. If any 2 answers of the three are 'Germany', you will pay taxes to the German government.

So, if I, say, have my primary residence in the UK, and I work remotely while sitting at my desk in that residence, and the site of my employer - the actual branch office that has hired me on to do this work - is Berlin, then I will pay taxes to the UK. If I were to rent a room in Berlin for the duration of that contract, then I would pay taxes to Germany.

Yes that's broadly it. Just to clarify on pin No. 3, its "where is the economic employer". I.E who ultimately pays for, and benefits from, your labours. Whilst there may be a number of parties in the contractual chain who will benefit from the contract, only one entity is meeting the cost, everyone else in the middle is just passing invoices up and down. Where the economic employer is based is the third pin in the map.


Glad to have been able to help. There may be some times where even these three relatively simple criteria aren't particularly clear or decided, but if you follow this thought process at the beginning of each new contract, it helps keep you honest

[contractingMan]

Update: Dear All, thanks for your help. I did indeed receive an answer -- and a clear, definitive one - from Sue B . Thanks loads to her for her consummate expertise. With all errors or inaccuracies being mine - here is the answer:

When working for, say, a German company, 3 criteria - call them 'pins' - must be reckoned: (1) where you live during the contract - namely, your primary residence; (2) where - in what physical location - will you do the work; (3) where the site of your employment is physically located. These 3 pins yield 3 answers. If the majority - any 2 of the answers - are, 'UK', then you will pay taxes for this contract to the UK government. If any 2 answers of the three are 'Germany', you will pay taxes to the German government.

So, if I, say, have my primary residence in the UK, and I work remotely while sitting at my desk in that residence, and the site of my employer - the actual branch office that has hired me on to do this work - is Berlin, then I will pay taxes to the UK. If I were to rent a room in Berlin for the duration of that contract, then I would pay taxes to Germany.

[NotAllThere]

contractingMan When you've got it sorted, please report back as to how it turned out.

[Sue B]

Hello, happy to have a chat, am sure I could help clarify here. Do please PM me if you want to talk.

[contractingMan]

Thank you all for your perspectives.

I, the OP, am indeed deeply confused. Here are some facts and a few assumptions.

Facts
1. I have no current address in Germany.
2. I am a UK citizen.
4. I have HAD an address - an address I duly registered with the German authorities - in Germany, in 2017-18.
5. I have in the past paid taxes to the German government on earnings for a contract I worked in Germany while living at that registered German address, in 2017-18.

Current Assumptions
1. I would, on my planned contract, work most days remotely, from a desk in the UK.
2. On my planned contract I would occasionally visit and work onsite - say, 3 days per month, for the client at their offices in Germany.
3. I will be paid in Euros by an employment agency based entirely in Germany. (to whom I will speak further tomorrow(!))

[jamesbrown]

Sounds like the OP is deeply confused and is dealing with a German agency that is deeply confused. Your best bet is to speak to a professional. Paging Sue B.

[NotAllThere]

I'm puzzled to how they're going to make these deductions since you won't have an address in Germany and won't be registered in Germany. It's also odd that you would pay tax and social contributions in a country you're not resident in. I'm guessing you'll still be using the NHS etc. in the UK - but apparently not contributing.

It's possible that your employer doesn't know what they're doing.

Do you hold an EU passport? If not, how are they employing a British person. Are they getting your a work permit - which also shouldn't be possible without a German address.

[sadkingbilly]

Generally speaking you are taxed where you physically perform the work. I contracted through a UK agency to a UK company from abroad - I paid zero uk tax.

How exactly is the contract set up? Are you actually an employee of the agency, or are they hiring the services of your UK ltd company?

funny, i had the opposite. paid full UK tax and no local tax (which was actually better)

[contractingMan]

Thanks. It is useful to know that I would likely pay tax to the UK. No, I am fairly certain I will be an employee of the German agency. The agency will, for example, pay the Employer's half of the relevant German 'social' taxes: Health, Pension, Church tax, etc. Perhaps complicating things is that I will likely be asked to make occasional visits to the client in Germany. So at least some days (not 0 days) I will work in Germany.

[NotAllThere]

Generally speaking you are taxed where you physically perform the work. I contracted through a UK agency to a UK company from abroad - I paid zero uk tax.

How exactly is the contract set up? Are you actually an employee of the agency, or are they hiring the services of your UK ltd company?

[contractingMan]

I am investing the feasibility of a contract I would have with an agency based in Germany. I would work most of the time remotely, sitting most weeks at a desk in the UK, making occasional short visits to a client company in Germany. My employer would be the German recruiting agency. Neither client company nor agency have offices in the UK. I will be paying full German taxes.

My question is: would I also owe UK taxes for this contract work? If so, would these UK taxes be calculated at some special rate? or would I owe full UK taxes?