Working abroad as a contractor

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One of the perks of contracting is the chance to work in a location of your choice. This applies to you can take your business to another country. Working abroad takes a considerable amount of planning and research, but is achievable if you take the necessary steps.

We’ve put together some advice and guidance to prepare you ahead of your new venture.

Making things permanent

UK

If you’re going abroad for only a few weeks or months, you will be treated as a UK resident.

This changes when you have lived abroad for more than three years or your visits to the UK are less than:

    • 183 days in any tax year
    • An average of 91 days per tax year over a period of four years

    HMRC will also consider a number of additional factors, including any UK properties you own, work responsibilities and family ties.

Before leaving the UK

Before you leave the UK as a contractor, there are a few points to consider:

  1. Each country has their own tax laws, some are very different from UK legislation, and some can have rather unusual restrictions. It’s worth researching these restrictions, so you don’t end up being caught out.
  2. In some countries, unless you are provided with a local resident visa, it is unlikely that you will be allowed to open a bank account in local currency. You will therefore need to investigate how your client intends to pay you.
  3. The good news is, it is very unlikely that you will be the first person to have been asked to provide your services as a contractor to the client.
  4. Source expert tax help in the country you are working in. You could be liable for additional tax, especially if you will be spending a considerable time overseas.
  5. You can trade and invoice through your UK company, in a variety of countries. However, to do this effectively, you will need to consider the implications with regards to your UK corporation and personal tax for bringing money back into the UK, and think about continuing your National Insurance contributions. If you don’t keep these updated, you may not be eligible for NHS treatment or your state pension.

Contact SJD Accountancy

To find out more about contracting abroad, give our experts a call.

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Corporation tax rates

Contracting through your own limited company in the UK is commercially rewarding.

It is also the most tax-efficient way of operating, one of the reasons is that the UK has one of the lowest Corporation Tax rates in Europe.

The current rate is 19% (2019-20) and is set to be reduced to 17% for the tax year 2020-21.

Working as a contractor through your own limited company in the UK is commercially rewarding. It is also very tax-efficient, as the UK has one of the lowest Corporation Tax rates in Europe; the current main rate is 19% and is set to be reduced to 17% for the year starting 1st April 2020.

Country

Corporation Tax Rate

United Kingdom

19%

France

34.4%

Spain

25%

Germany

29.8%

Italy

27.8%

 

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