Deciding to work abroad is an exciting time in anybody’s career, but if you are looking to operate as a limited company then there are many points and options to consider.
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.
Before deciding to leave the UK as a contractor, consider the following points.
- 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.
- 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
- 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.
- 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
- 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
- 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
Your client or agent should be able to answer most questions you have. Also, other contractors are usually willing to provide a helping hand, when it comes to giving tips and advice.
It’s worth looking up the current currency exchange rates, and the cost of expert tax advice in the country of your choice. This, coupled with potentially higher corporation tax, may take the shine off those higher daily contract rates.
If you are working overseas for a short amount of time, for example a couple of months, then there is most likely little to worry about. On the other hand, if you are planning on contracting overseas long-term, it would be in your best interest to seek specialist advice.
If you are thinking of becoming a contractor or have any questions about working through your own limited company, please call our New Business Team on 01442 275789. Our guides to contracting in Belgium, Germany, France, and the Netherlands also provide specific advice. We also have a selection of guides to make your journey simpler.
About International Contracting
SJD has partnered with Generate, an international contractor payroll solutions company who have the skills and experience to support contractors working abroad ensuring they operate in a compliant and tax efficient way.
Contracting abroad can bring many rewards but it also carries extra responsibilities and challenges with regards to tax and in-country compliance. Few companies offer support to British and non-British contractors working overseas. However, International Umbrella has the skills and experience to support contractors working abroad ensuring they operate in a compliant and tax efficient way.