Contractors' Questions: Can non UK-residents work in England if already in Ireland?

Contractor’s Question: I'm an IT contractor from Croatia working in Ireland. But I receive a lot of offers from London and am thinking about moving there to work. Can Croatian citizens work in England as contractors without any unwanted tax issues, and what’s the best way to start working in London without rule-breaking?

Expert’s Answer: As an EU citizen, you are entitled to live and work in the UK. There are no immigration issues to worry about at present. You are undoubtedly aware that the UK recently voted to exit the EU. This has triggered a surfeit of posturing from the UK government, EU Commissioners and Member States with regard to exit timing and conditions. If the pundits are correct, the UK is not expected to leave the EU until mid-2019.  As a Croatian citizen, you should not have to face any issues until that date.

When you come to London, you’ll have a choice of operating structures – either employment through an umbrella or a recruiter; or self-employment; or through your own PSC (Personal Service Company)

If you are currently working through your own Irish PSC, it can be registered in the UK for your UK assignment. You will also have to produce corporate accounts in both countries and end up paying the higher tax liability. This is expensive and administratively complicated. You will be far better off creating your own UK-registered PSC.

If you are used to working through an Irish umbrella, you can elect to use a UK umbrella for your new assignment – the internet is laden with them. Most operate compliantly but, depending on your gross contract rate, using one could yield an unacceptably-low income retention. Your existing ‘brolly’ may be able to recommend a safe and secure one to use. 

Without knowing your personal circumstances, I will presume your volume of contract offers indicates you have highly sought-after skills and can command a high rate. To help you determine your best structure in order to achieve the optimum net return from your chosen assignment, I strongly recommend you seek early advice from a regulated UK tax adviser such a Chartered or Certified Accountant. They are the only people duly regulated to give the advice you need. 

You may be surprised to learn that in the UK, unlike Croatia, anyone can claim to be an accountant without having the professional qualifications. As a result, many contractors find themselves using commercial providers of accountancy services either dealing out generic advice dressed up as personal advice or promising unrealistic returns from dodgy schemes. Sadly, many of them are high profile on the internet and heavily integrated into the contractor market. Ask for evidence of professional institute membership before appointing your chosen accountant. In short, always seek regulated advice. Never compromise your stated desire to “start working in London without rule-breaking.”

The expert was Mike Philips, a director of overseas contracting consultancy its international.

Wednesday 24th August 2016