Freelance contractors looking to work in the UK need to be aware of several items in order to do so.
Firstly residency – while there are new rules which have various substantive tests, including accommodation for use and individual criteria, in general as a guideline if, for the duration of your contract you spend the minority of your days in the UK then you will possibly be deemed to be non -resident for tax purposes. This could bring quite substantial tax benefits depending on how the contract is structured and how your personal circumstances are managed. Often it depends on how these days are accumulated to factor if they will be relevant to the calculation. This brings about some important issues which should be factored into your contract negotiation. If, however you are tax resident you will need to submit a UK tax return. If you are resident for tax purposes and pay UK income tax then this may be recovered in your own country through a double tax treaty. Please note that the VAT threshold in the UK is £70,000 per year so if your turnover is more than this then this could also be a VAT issue.
Secondly work permits - there are various types of work permits in the UK, but the following is a summary of each that might apply to contractors;
Tier 2 Work Permit – In order to apply for this an employer has to sponsor you for a specific job, the employer must create a certificate of sponsorship for the contractor. The contractor then has a ten digit reference number, only then can they apply for the Tier 2. In order for the application to get approval it needs to be evidenced that the employer could not find a suitable person who is already a resident worker. Also in order to qualify for this the contractor must score at least fifty points for attributes and satisfy the English language and maintenance requirements.
Youth Mobility Scheme – these are visas for citizens aged between 17 and 30 who are looking to work in the UK on a short term basis. It should be noted that these only apply to certain countries such as Australia, New Zealand, Canada and Japan. This visa will allow the individual to work and travel in the UK for a period of up to two years.
Ancestry Visa – these are for citizens of a commonwealth country who have a grandparent that was born in the UK. This will allow you to work in the UK for up to five years without restriction and after such time you will be able to apply for indefinite leave to remain.
Thirdly national insurance – you will need a national Insurance number which you can apply for at the department of Work and Pensions. This is used to keep a record of your national insurance contributions.
Once all the above is taken care of you will also need a UK bank account
in order to access your wages. Chesterfield can make the introduction for you with one of the top banks in the UK and so greatly speed up the process.
Many contractors choose to use a firm like Chesterfield which offers services such as enabling you to work under a self-employed contract or operate through an Umbrella employment contract
. These have many advantages such as allowing you to claim back your expenses, possibly reduce tax and are able to deal with all compliance paperwork. Some agencies will not work with a contractor unless they come under a recognised umbrella such as Chesterfield has to offer.