Contractors’ Questions: Can EU citizens like me freelance for a UK limited company?

Contractor’s Question: I was wondering if or how an EU citizen living outside the UK could freelance for a UK limited company since the Brexit deal of January 1st 2021, or freelance via one's own limited company -- if that’s easiest?

Expert’s Answer: It's not clear from your question if you plan to carry out the work from the EU or the UK. Assuming that you supply your services to the UK limited company from where you live in the EU, you have no problem. You carry out the work as you agree with your client, and then you bill them.

Don't charge VAT

As the UK is now a ‘third country’ (in light of the UK-EU deal you mention) your services are now exports, and you should not charge VAT. Your client will have to account for the notional VAT on the 'import' of your services. Your client should then pay you to your bank account wherever you bank. Straightforward enough!

If you plan to come to the UK to work, then it's a different story. The end of the UK's ‘transition period’ brought an end to persons' ‘Free Movement,’ and an EU national does not have the right to live or work in the UK any longer.

Permits are the only possible way

Suppose you were not resident in the UK before the end of the transition period (11.00 pm GMT on December 31st 2020). In this case, you will need to apply for a work permit to undertake any lucrative activity. You can visit the UK, of course, for up to 180 days -- but you may not work.

The UK now has in force a point-based immigration system, and you must score 70 points or more to qualify i.e. 70 points is the minimum score you need to be able to apply to work in the UK.

But you will also need to find a sponsor for the work permit. In your case, your client seems the obvious contender, yet they may or may not be willing to do this. You can find more details on the new immigration scheme on the UK government’s webpage, and more about the points you need here.

A new visa is en-route

It might interest you to know that at the UK’s Budget 2021 last week, the chancellor of the exchequer (our finance minister), announced a new ‘highly skilled worker’ scheme that does not demand a sponsor. The scheme is not yet in operation, and you will have to await further details. When it does arrive, the visa’s small print will be very much worth checking.

Finally, freelancing in the UK via your own company will not be a possibility. You will be unable to sponsor a work permit under the points-based system. Your best bet, it seems, is for you to consult the provisions of the UK’s existing skilled migrant worker work permit. Good luck!

The expert was Kevin Austin, managing director of overseas contracting advisory Access Financial.

Tuesday 9th Mar 2021
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Written by Kevin Austin

Kevin is a Fellow of the Institute of Chartered Accountants in England and Wales, a Fellow of the Association of Chartered Certified Accountants, a Fellow of the Association of International Accountants and a Fellow of the Chartered Management Institute.

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