Working from Germany - contracting in the UK (most tax-efficient method)

[Matt1010101]

Hi,

I recently moved to Germany and am looking to keep my contract with the UK company I contract for. I have my own limited company in the UK.
Since I live in Germany I need to pay tax here, I'm looking for the best way to do this.

As far as I am aware, I can sign up with an German Umbrella company, so the process would be:

UK client pays my UK Ltd Company ->
My UK company pays the German Umbrella, and that sorts out payroll here and pays me into my German Bank account.

Has anyone done this already? or can give me advice on this?

Thanks in advance.

Matt

[cojak]

Sue B This one is for you I think…

[jamesbrown]

Reading between the lines, it sounds like you don't want your UK client to be aware that you're living in Germany or something? Either that or they are not willing to change the contract to pay a German umbrella. Bottom line, you are introducing more complexity than needed, so there must be a reason for it...

[Matt1010101]

Client knows I live in Germany, it's easier for them just to keep paying my UK company. If I have to, I could ask them to pay a different company and re-do my contract to go via the German Umbrella. Would prefer to avoid that if possible.

I thought it could be done the way I suggested. And the German Umbrella just deal with my payroll here in Germany.

[BR14]

Client knows I live in Germany, it's easier for them just to keep paying my UK company. If I have to, I could ask them to pay a different company and re-do my contract to go via the German Umbrella. Would prefer to avoid that if possible.

I thought it could be done the way I suggested. And the German Umbrella just deal with my payroll here in Germany.

have you asked the Finanzamt what their take on this arrangement would be?
they do have a pretty draconian reputation on world earnings, and swingeing penalties for non-compliance.

[eek]

have you asked the Finanzamt what their take on this arrangement would be?
they do have a pretty draconian reputation on world earnings, and swingeing penalties for non-compliance.

I think that's the reason he is looking at using an Umbrella firm rather than pretending to be a Freiberufler

[jamesbrown]

Client knows I live in Germany, it's easier for them just to keep paying my UK company. If I have to, I could ask them to pay a different company and re-do my contract to go via the German Umbrella. Would prefer to avoid that if possible.

I thought it could be done the way I suggested. And the German Umbrella just deal with my payroll here in Germany.

There's "can" and there's "should". Simpler (for you) is almost always better.

[Matt1010101]

Ok, thanks for everyone's advice.

Would a programmer / IT consultant still be considered a Freiberufler? It's not explicity stated on the list I found, and I only work for one client not multiple at the moment. Is there then a requirement to be free lance that I have more than one client?

So it sounds like the other options are:

German Umbrella

1. Client pays -> German Umbrella
2. German Umbrella pays me

I won't have to run my own company either in UK or in England, umbrella takes a cut.

or..

German Company (owned by me)

1. Set up my own company
2. Client pays my German company

or...


FreeLancer (Frieberufler)

1. Set up in Germany as Freelancer
2. Client pays me to Germany as freelancer

[eek]

Ok, thanks for everyone's advice.

Would a programmer / IT consultant still be considered a Freiberufler? It's not explicity stated on the list I found, and I only work for one client not multiple at the moment. Is there then a requirement to be free lance that I have more than one client?

So it sounds like the other options are:

German Umbrella

1. Client pays -> German Umbrella
2. German Umbrella pays me

I won't have to run my own company either in UK or in England, umbrella takes a cut.

or..

German Company (owned by me)

1. Set up my own company
2. Client pays my German company

or...


FreeLancer (Frieberufler)

1. Set up in Germany as Freelancer
2. Client pays me to Germany as freelancer

Get some advice because the only option is a being on the Germany payroll of someone (that may be an umbrella it may be something else).

And I'm sat in the UK telling you this based on knowledge that you really need to get very quickly.

[Workr International]

The key thing is if you are in Germany you should be paying your taxes in Germany which it sounds like you want to do so that is positive. How you go about doing that can be done by any of the 3 options you put forward. With regards to Freelancing one of the key parts of the legislation in Germany is that no more then 5/6 of your income can come from one client, so you should have an intention to have multiple clients. When you first register as a freelancer you have 3 years to meet that criteria, so freelancing could be an option for you if it is your intention to have multiple clients and as long as you meet all other freelancing requirements. The most straight forward solution is probably a German umbrella company as they will do everything for you, but as you rightly say they will take a fee for their service. the option of setting up your own company is also a valid option but there could be a bit of admin for you do. It does look like you are on the right track though with the options you are considering.