• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Working remotely for a UK client from an EU country

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Working remotely for a UK client from an EU country

    I'm planning to move out of the UK next year but continue to work remotely for my UK client. I may visit them some time, but it would be probably only a few times in the year, certainly not commuting.

    If they introduce the IR35 changes next April, I'm pretty sure the client will declare us all inside IR35.

    My question is will IR35 apply to me? I have heard many conflicting opinions so far.

    #2
    IR35 is a company tax, but it requires that the worker is UK tax resident.

    If the worker is not UK resident for tax purposes, then the worker is not chargeable to UK tax and hence WorkerCo is not liable to consider IR35 or make any deemed direct payments w/r to being inside IR35.

    However, when the rules change in April, the UK client may deem your contract to be inside IR35 and you will then have to argue the point with them. Whether they will listen is unknown, but they would be wrong not to listen or to make deemed direct payments that do not apply the NT coding (i.e., no tax deducted).

    Whether you're actually non-resident is a matter of fact, according to the statutory residence test.

    Comment


      #3
      Originally posted by jamesbrown View Post
      IR35 is a company tax, but it requires that the worker is UK tax resident.

      If the worker is not UK resident for tax purposes, then the worker is not chargeable to UK tax and hence WorkerCo is not liable to consider IR35 or make any deemed direct payments w/r to being inside IR35.
      Ok that's point I want to clarify. If I'm not UK resident for tax purposes, but receive my income in the UK, doesn't this mean that I need to pay tax on the UK income, but not on any non-UK income?

      Comment


        #4
        Originally posted by skysies View Post
        Ok that's point I want to clarify. If I'm not UK resident for tax purposes, but receive my income in the UK, doesn't this mean that I need to pay tax on the UK income, but not on any non-UK income?
        No, the general rule (including in the UK) is that you pay tax where the work is done (not where the client is based, for example) and you pay tax on your worldwide income where you’re resident. There are some exceptions, such as when you’re a US citizen. In your case, the work is done overseas, so you’ll pay tax overseas. If you maintain your UK residence, it’s a different story (then tax treaties come into play).

        Comment


          #5
          Why would you want to receive your income in the UK if you don't live there? Invoice the client in Euros and receive payment in the country you're living in.

          Comment


            #6
            Originally posted by ladymuck View Post
            Why would you want to receive your income in the UK if you don't live there? Invoice the client in Euros and receive payment in the country you're living in.
            By receive, I assume the OP means that the client is based in the UK. If the OP maintains bank accounts here and other ties, they may remain UK resident according to the statutory residence test.

            Comment


              #7
              Originally posted by jamesbrown View Post
              By receive, I assume the OP means that the client is based in the UK. If the OP maintains bank accounts here and other ties, they may remain UK resident according to the statutory residence test.
              I think I will pass the non-residency tests for tax purposes. My concern is that, even if I'm non-resident, I may be still be declared as inside IR35 by the client. Will that make any sense?

              Comment


                #8
                If you work remotely for a UK client in a foreign country UK law does not apply. You will need establish a business or register self-employed in the country in which you're resident.
                I'm alright Jack

                Comment


                  #9
                  Originally posted by skysies View Post
                  I think I will pass the non-residency tests for tax purposes. My concern is that, even if I'm non-resident, I may be still be declared as inside IR35 by the client. Will that make any sense?
                  Be careful and read RDR3 thoroughly. You "may" qualify for split year treatment in the UK tax year you leave the UK, or you may not. You will not be confident of non-UK tax residency until you have spent a full UK tax year outside the UK within the rules laid down in RDR3. It is complex but by understanding the rules properly and following them scrupulously, you may indeed be non UK tax resident. Or, like me, you may be dual or even triple tax resident like I was a couple of years ago. If in the the end client doesn't agree to pay you gross, I'm not sure you can do anything about it?
                  Public Service Posting by the BBC - Bloggs Bulls**t Corp.
                  Officially CUK certified - Thick as f**k.

                  Comment


                    #10
                    Originally posted by skysies View Post
                    I think I will pass the non-residency tests for tax purposes. My concern is that, even if I'm non-resident, I may be still be declared as inside IR35 by the client. Will that make any sense?
                    None at all. If they did something the nonsensical, you may even be able to claim the tax back - but not the NIC.

                    It should make sense to them that they pay you gross. Then they won't have to pay ERNIC, and so you'll cost less.
                    Down with racism. Long live miscegenation!

                    Comment

                    Working...
                    X