Contractors’ Questions: Can a UK umbrella company re-employ an EU national with a Scottish client?

Contractor’s Question: Is it possible to work on a contract in the UK for an EU person/national under the Brexit deal?

And if it is possible, how can I do the work tax-efficiently or with least hassle, given that I’m from Lithuania? If it helps to know I did broadly the same work I’m now expecting to secure, before the Brexit deal, but the work is in Scotland and previously to execute it I used an umbrella company. Is it ‘business as usual’ or does Brexit or covid complicate it?

Expert’s Answer: Unless you were in the UK before the end of the Transition Period that ended on December 31st 2020, and registered for settled or pre-settled status before June 30th, you are prohibited from working in the UK without a work visa.

On that December date, the Freedom of Movement of Persons came to an end. Therefore, if you want to work in the UK from January 1st 2021, you will need to obtain a work visa. There are a few routes to getting such a visa. The most common is the Skilled Worker Visa. You can find full official details of the scheme here.

No UK umbrella company is open to you anymore

You will need to find a UK client who can sponsor you and, to do that, they will have had to register for the scheme with the UK’s Home Office. You must be employed, and you must work for the company that sponsors you. They cannot subcontract you to another business, so unfortunately the umbrella company arrangement you used previously will no longer be open to you.

Skilled Worker Visa -- the costs involved

Further unhelpfully I’m afraid, there are costs associated with the scheme. These comprise:

  • Application Fee. The UK  government charges fees for the visa application, which are between £610 to £1,408, depending on your circumstances.
  • A Healthcare Surcharge. This is usually £624 per year
  • Funds to support yourself when you arrive in the UK. You’ll usually need to have at least £1,270 available (unless you’re exempt).

Potentially helpful, you’ll pay a lower application fee if your job is on the shortage occupation list. The Home Office will tell you how much you need to pay when you apply.

The UK is the worst out of 27+ states

As you’re probably starting to see, it is so much harder for an EU national to come to work in the UK than the rest of the 27 EU states, Norway, Switzerland, Iceland, and Liechtenstein. So you will likely need to have a compelling reason to prefer the UK over these destinations..

As an aside, those who want to invest in the UK post-Brexit may do so under the Start-up and Innovator visa schemes. But based on the details you provide, these may not meet your needs.

There are other types of visas with which you can come to work in the UK, and you can find these on .gov here.

Face covid restrictions once you clear the visa hurdle

 In your question, you refer to the coronavirus pandemic. But please note, I have not addressed the likely covid restrictions you may face, because the work visa issue is the first hurdle that you need to negotiate.

As far as the restrictions are concerned however, you can obtain information from your client and the UK Foreign and Commonwealth Office websites, to learn when travel is permissible and under what conditions.

The last part of your question requests details about a tax-efficient way to work. Under the employed sponsorship schemes, you will be on your employer’s payroll, and only as an investor will you have the chance to be self-employed or work via a limited company. Good luck!

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

Wednesday 4th Aug 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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