How long with startup package?

[biergarten]

Hi,

i'm new to contracts. I've been reading the First Timers guide and through the forum. It looks like the PCG Startup package is the way to go for me. My only worry is the time. I phoned the PCG but they are closed till the second. How long will take to set up the limited company using the PCG Startup package? The start date of my contract is the 7th.

...and by the way, the fact that the contract will be overseas, in an EU-country, although through a UK Agency, could make the PCG Startup package not the best choice? or is it irrelevant?

[NickFitz]

I haven't used the PCG, but when I last set up a limited company (in 1999) it was up and running within a couple of days. These days, I imagine things can be done even faster, what with online registration and so forth.

[BrilloPad]

welcome

As NF said PCG are very efficient and very quick. Best to ask them directly about if you are covered.

[SueEllen]

...and by the way, the fact that the contract will be overseas, in an EU-country, although through a UK Agency, could make the PCG Startup package not the best choice? or is it irrelevant?

What EU country? Are you actually working in that EU country or in the UK? And how long will you be working in that EU country?

Different tax laws mean that it may not be the most tax efficient way to work.


For example in Germany and France from day 1 both you and your limited company should be in their tax system, and using a UK limited company is very tax inefficient. In Sweden and Finland you can use your UK limited company and stay out of their tax system if you only there for 182 days. They are simply not interested in you. However spend one day over that time period whether you are working or not, and they want the tax for the entire period you were in the country. In Norway you can use a UK limited company but must be in their tax system and you have to take a certain amount as salary etc.

UK agencies do not give the best advice on how to structure yourself if you are working in an EU country so it's up to you to:
1. Search these forums and see if anyone else has worked in that country - there are a lot of threads mentioning Germany, an extensive Belgium thread and a few mentioning some other countries.
2. Read the other country's tax pages - some of them are in English or can be translated using google translate.
3. Contact an accountant based in that country via using an expat forum (search on google) and find out the most tax efficient way to work.

However be warned if the agency doesn't have a associated branch in that EU country they may refuse to allow you to work the most tax efficient way for that country.

Whatever you do avoid any scheme that allows you to put your money off-shore unless you want to end up in a foreign prison.

[yasockie]

The start date of my contract is the 7th.

...and by the way, the fact that the contract will be overseas, in an EU-country, although through a UK Agency, could make the PCG Startup package not the best choice? or is it irrelevant?

The start date is not as important, in my view at least, it's the payment date - by then you will need to have all the details of your company, VAT Number, bank account all sorted out.
For the actual contract they will also need some details like a company name and the address, but these you could theoretically provide even before the company is fully formed.

As for working in another country, in most cases you should be fine working up to 180 days or so, after which you have to switch to paying your personal income there. This varies by country and one notable exception is Germany where you should be extra careful - please search the forums...

[biergarten]

Thanks for the replies. It will be in Stuttgart. It involves working on site most of the time, but one week per month I could work from home. My idea is to set up a UK Limited Company.

[SueEllen]

Thanks for the replies. It will be in Stuttgart. It involves working on site most of the time, but one week per month I could work from home. My idea is to set up a UK Limited Company.

I suggest you do a search on Germany and working there on these forums. (Hint - use the search box. A poster called "Chef" has some informative posts. )

The most tax efficient way for you to work there is as a freelancer.

However your UK agency may not allow you to do this and make you work through a management company.

Even this is more efficient than working through a UK limited company.

However make sure the management company pays all taxes you owe and doesn't have an off-shore scheme as the German taxman is chasing people from years ago who are now in the UK and threatening them with prison if they don't pay the tax back, interest and fines.

[Wanderer]

Thanks for the replies. It will be in Stuttgart. It involves working on site most of the time, but one week per month I could work from home. My idea is to set up a UK Limited Company.

Uh, be very careful here. The impression I get is that it may not be as straight forward as setting up your own UK LTD company and paying tax in the UK while working in Germany....

Do a Google search for site:forums.contractoruk.com germany and read the discussions about German taxation in this forum so you can make an informed choice about how to proceed and also consider getting specialist advice (but watch out for tax avoidance schemes which may come back to bite you).

[Jessica@WhiteFieldTax]

I haven't used the PCG, but when I last set up a limited company (in 1999) it was up and running within a couple of days. These days, I imagine things can be done even faster, what with online registration and so forth.

A basic company set up is almost instant at Companies House via their online portal, a couple of hours wait from submission normally, although they do hedge their bets and say next day, so it's really as long as it takes you, or your accountant/other advisor, to login and do it.

Things like vat and PAYE registration take a bit longer, normally at least two weeks, possibly more, for VAT, although you can invoice without a VAT number, it's messy.

Bank accounts can be the bug bear. There is often no rhyme or reason, even the experienced players in the freelance market like Cater Allen can take an age, and be very pedantic.

I would normally advise anyone to give themselves four clear weeks, ideally before starting contact, if not before first invoice, to deal with all this.

That said, of course, the world isn't ideal. You can get a instant company, via Companies House, yourself or through your accountant, and sort the rest out later.

Above is typical for UK. If you are contracting abroad, then you need advice from some one who knows the country you are going to. If you do decide to use a UK company, then allow extra time if currency bank accounts are needed. You may also be able to skip UK vat registration, but you may have to register in host country.