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Help - Why is Belgium so complicated!?

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    Help - Why is Belgium so complicated!?

    Hi - newbie here so don't shoot! Query is along the lines that I have a possible opportunity in Brussels, for 180 days work, that also includes travel to other countries outside of Belgium, and also includes time working in the UK. The end client in Belgium is actually a client of a UK company for which I would do the work, thus my proposed setup is (note the UK client here is happy with that);

    My Ltd Co --> UK Intermediary (agent) --> UK company (travel as required for European client)

    I am however consistently being pushed down a path of;

    My Ltd Co --> Belgian Intermediary (agent) --> End Client in Brussels

    Try as I might, I cannot get a rationale why. I've read many articles on LIMOSA, HMRC guides to residency, the automatic overseas tests and all sorts of small print I'd really rather forget - and cannot see how a 180 day engagement setup per above would put me into a situation where I would be required to pay local taxes rather than UK tax (as a UK national).

    Not only is this all quite disconcerting, it's putting me off the prospect of taking the contract due to [my perceived?] ambiguity on all of this.

    Any wisdom out there among you veterans would be greatly appreciated.

    B34ker

    #2
    After Brexit this problem will go away...

    Comment


      #3
      Originally posted by B34ker View Post
      Hi - newbie here so don't shoot! Query is along the lines that I have a possible opportunity in Brussels, for 180 days work, that also includes travel to other countries outside of Belgium, and also includes time working in the UK. The end client in Belgium is actually a client of a UK company for which I would do the work, thus my proposed setup is (note the UK client here is happy with that);

      My Ltd Co --> UK Intermediary (agent) --> UK company (travel as required for European client)

      I am however consistently being pushed down a path of;

      My Ltd Co --> Belgian Intermediary (agent) --> End Client in Brussels

      Try as I might, I cannot get a rationale why. I've read many articles on LIMOSA, HMRC guides to residency, the automatic overseas tests and all sorts of small print I'd really rather forget - and cannot see how a 180 day engagement setup per above would put me into a situation where I would be required to pay local taxes rather than UK tax (as a UK national).

      Not only is this all quite disconcerting, it's putting me off the prospect of taking the contract due to [my perceived?] ambiguity on all of this.

      Any wisdom out there among you veterans would be greatly appreciated.

      B34ker

      A lot of European countries don't recognise one man limited companies, therefore the agent is under a lot of scrutiny to make sure that the employment meets the very strict rules for companies that engage only a single employee. I did look at how to overcome this myself but the lengths you need to go to to make this work was not worth the expanse and effort.

      Having said that although taxes are slightly higher, you do get a lot back in tax later, a gig I did in Holland gave me over 21K Euro back about 9 months after the contract ended putting my total tax paid less than an inside IR35 role in the UK but not as good as outside IR35.
      Warning unicorn meat may give you hallucinations

      Comment


        #4
        Originally posted by AtW View Post
        After Brexit this problem will go away...
        Depends if what other passports he has.
        "You’re just a bad memory who doesn’t know when to go away" JR

        Comment


          #5
          Originally posted by B34ker View Post
          Hi - newbie here so don't shoot! Query is along the lines that I have a possible opportunity in Brussels, for 180 days work, that also includes travel to other countries outside of Belgium, and also includes time working in the UK. The end client in Belgium is actually a client of a UK company for which I would do the work, thus my proposed setup is (note the UK client here is happy with that);

          My Ltd Co --> UK Intermediary (agent) --> UK company (travel as required for European client)

          I am however consistently being pushed down a path of;

          My Ltd Co --> Belgian Intermediary (agent) --> End Client in Brussels

          Try as I might, I cannot get a rationale why. I've read many articles on LIMOSA, HMRC guides to residency, the automatic overseas tests and all sorts of small print I'd really rather forget - and cannot see how a 180 day engagement setup per above would put me into a situation where I would be required to pay local taxes rather than UK tax (as a UK national).

          Not only is this all quite disconcerting, it's putting me off the prospect of taking the contract due to [my perceived?] ambiguity on all of this.

          Any wisdom out there among you veterans would be greatly appreciated.

          B34ker
          First: Tax us due where the work is done.

          Second: Despite the four freedoms; there is no EU Tax harmonisation.

          So, imagine if it wasn't Belgium but say, South Korea or Argentina. Would you still expect not to pay any local tax? What if an American came to UK to work for 6 months sat next to you, you be happy if he paid no UK tax?

          Comment


            #6
            Can I check this with you...
            1. You are currently working as a limited company (1) through an agency (2) into a UK company (3) who do work for a Belgium company (4).
            2. The Belgian company want you to work for them through a Belgian agency, cutting out (2) and (3).


            Of course the UK company is happy with you working through them, because they will get to make their cut on the process. If you go via a Belgian agency, then the UK agency and UK company both lose margin.


            If it were me, I'd want to check my current contract to see if it allowed me to go direct to an end client, bypassing my current agent and the UK company. You might find there is a 6/12 month lock in.


            Next I'd want to look at the new contract in detail. In your current set up, you'll get expenses to travel to Belgium. If you are working through a Belgian agent, will you still be able to charge the Belgian client for your travel and accommodation?
            …Maybe we ain’t that young anymore

            Comment


              #7
              Originally posted by stek View Post
              First: Tax us due where the work is done.

              Second: Despite the four freedoms; there is no EU Tax harmonisation.

              So, imagine if it wasn't Belgium but say, South Korea or Argentina. Would you still expect not to pay any local tax? What if an American came to UK to work for 6 months sat next to you, you be happy if he paid no UK tax?
              Thank you Stek. I think it is more the definitive clarity on how best to work in Belgium, and what to do to support that, whether I pay tax in the UK or Belgium I have no issue with, but without knowing what to pay, who to, how much and why, that it becomes impossible to do the sums on the value i will get from the engagement. For 110 days or so I cannot see the value in going through all of the potential onboarding in Belgium for something that will be over very quickly, and was surprised as I know a number of other UK contractors in EU countries and maintaining UK tax status with the same setup I was proposing.

              Not sure how it will all play out but the alarm bells have definitely gone off! Thanks again.

              I'm sensing your "second" comment is the key to why I'm getting a range of views.

              Comment


                #8
                Originally posted by motoukenin View Post
                A lot of European countries don't recognise one man limited companies, therefore the agent is under a lot of scrutiny to make sure that the employment meets the very strict rules for companies that engage only a single employee. I did look at how to overcome this myself but the lengths you need to go to to make this work was not worth the expanse and effort.

                Having said that although taxes are slightly higher, you do get a lot back in tax later, a gig I did in Holland gave me over 21K Euro back about 9 months after the contract ended putting my total tax paid less than an inside IR35 role in the UK but not as good as outside IR35.
                Thanks Motoukenin, per my reply to Stek below I am beginning to think that for the duration of the work vs the onboarding in Belgium will render an otherwise great looking contract totally unworkable. Shame for me, shame for client, so much for EU portability. Not one [of 20] people I have spoken to has said "it's easy, stick with it". Gotta be something in that!

                Comment


                  #9
                  Thank you WTFH. Amended below;

                  Originally posted by WTFH View Post
                  Can I check this with you...
                  1. My proposal is to work as a UK limited company (1) through an UK agency (2) into a UK company (3) who OWN a Belgium based company (4).
                  2. The UK company want you to work for them through a Belgian agency, cutting out (2) and (3).


                  Of course the UK company is happy with you working through them, because they will get to make their cut on the process. If you go via a Belgian agency, then the UK agency and UK company both lose margin. The UK company in this contract are the people who want the work done, they own a company in Belgium, so there is no margin there, UK agency has partners in EU countries so in essence would cut themselves out of the picture.


                  If it were me, I'd want to check my current contract to see if it allowed me to go direct to an end client, bypassing my current agent and the UK company. You might find there is a 6/12 month lock in. Is this still a valid question based on response above?


                  Next I'd want to look at the new contract in detail. In your current set up, you'll get expenses to travel to Belgium. If you are working through a Belgian agent, will you still be able to charge the Belgian client for your travel and accommodation? expenses was built into the rate, I'm unsure if it would be beneficial to separate them?

                  Comment


                    #10
                    Whether it is better to separate expenses from your rate depends on the tax regime in Belgium. I think I was told a few years ago that in Belgium it is better for permies to do it that way.
                    "You’re just a bad memory who doesn’t know when to go away" JR

                    Comment

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