Contractors' Questions: How to supply a non-EU client?

Contractor’s Question: I am a French freelance technologist living permanently in Surrey and have been contracting in the UK for about three years, having previously worked as an in-house IT manager in London for almost a decade.

While most of my current clients are based in the UK, or in another EU country, this week I received a firm request for my services from a potential direct client based in Geneva, Switzerland. The problem is that I have never worked for a client based outside of the EU. I do not know how this would work, or indeed if my business is allowed to supply services outside of the EU, even though I intend to base myself here in the UK to fulfil the contract. I've read up about contracting overseas but am still unsure, so please advise.

Expert’s Answer: Working with clients outside of the EU should not cause any issues for a UK-based contractor that has the right structure in place to work as a contractor in the UK. While it is viable to be a sole trader for your new opportunity from Geneva, having a limited company will offer more confidence to the prospective client, so that they do not appear to be contracting directly with an individual.

As the work will be carried out in the UK, the tax liability will remain in UK. However, the tax liability will change if the work will be carried out in another location, although you suggest you will be using your existing base in Surrey.  

The only change in working practice when working with a non-EU-based client is how the UK limited company invoices them. As the invoice will be for services to a non-EU client, the invoice should not have VAT included on it in accordance with the EU VAT directive. Please contact myself or one of my colleagues if you need further guidance.

The expert was James Macleod, of overseas tax compliance specialists Capital Consulting.

Thursday 18th Apr 2013