Paid from Germany, working in UK, effective tax scheme?

[Greenjack]

Hi all,
I'm a newbie to both this forum and contracting, so forgive me if this has been asked before...
I'm about to start a new role, based in the UK but paid from an agency in Germany in Euros. Are there any solutions out there that this situation might benefit from? (eg IOM schemes - would this make me less at risk than if I was being paid from the UK?) And is there a neat way to avoid the hefty bank conversion rates if I do just get paid in pounds?

Any advice gratefully received! Thank you!

[ASB]

Hi all,
I'm a newbie to both this forum and contracting, so forgive me if this has been asked before...
I'm about to start a new role, based in the UK but paid from an agency in Germany in Euros. Are there any solutions out there that this situation might benefit from? (eg IOM schemes - would this make me less at risk than if I was being paid from the UK?) And is there a neat way to avoid the hefty bank conversion rates if I do just get paid in pounds?

Any advice gratefully received! Thank you!

I don't know what your definition of "hefty" is. I have never had any real problems with the commission levels or exchange rates when converting. These days most banks will take euro paymentes through the iban number and exchange at a "fair" rate. Nothing to stop you opening a euro account if you beleive your fx skills are good and can time when to exchange.

There are lots of "solutions" out there that this might benefit from. Depends on your attitude to risk etc. Suggest you look at the BN66 thread for the sort of issue that can happen. If you're comfortable with the risk then fine.

Your individual status may give you more opportunities to be creative and possibly a little safe, but this depends on where you are domiciled, where you are resident, where your are ordinarily resident. Unlikely to apply from your description in your original post though.

If you do a search you'll find loads of info on this question. Certainly there are solutions that can work, generally depending upon your circumstance. Most of them simply seem to rely on them not coming to the attention of the authorities though.

You should also consider you tax and VAT position WRT Germany. It is probably irrelevant given your very brief description, but it might not be. Be especially careful with the place of supply rules for VAT. It is possible (though unlikely) that you are in fact providing domestic services in Germany from a VAT point of view. This depends upon a large number of factors. You can find the details on HMRC website. Or links to it have been posted in this forum numerous times. Intra EC VAT can be a nightmare, it is not beyond the realms of possibility that the UK client should be self accounting for input vat on the services (again unlikely though).

Edit: If you are on the UK FRS you also need to be very careful, unless the supplies are "out of the scope" of UK vat (and they could be either depending upon the circumstances) then you will still need to pay over the FRS percentage because they are part of turnover. If you are not actually billing anybody for this VAT that is not helpful.