New HMRC tax regulations.

[Richard Browne]

With regards to the new tax regs that HMRC have brought in recently, how does this effect guys based and working out of SE Asian countries, who work for UK based agencies. Can you still work for these agencies without them deducting taxes ?..From what I can understand if you are working in UK waters you will have taxes deducted regardless of where you are based, but if working outside of the UK on a permanent basis you wont. Iam currently based in Oz but considering a move to Philippines, so would be keen to know if the agencies would deduct tax at source..even if iam no longer a resident in the UK..

[Roy Simson]

Hi Echidna what your asking about is a very gray area and don’t believe any thing that the agency’s tell you as the problem is yours and not there’s but they are liable for any unpaid taxes . All I do know is after you have done a nice long trip you want your money in full and not find about 40% missing , I say 40% because since you don’t have a tax code your be put on emergency tax .

So to be on the safe side its best to work via Non UK agency’s , I did make up list just go through the list and your find many which are not in the UK .
The Uk inland revenue make there rules up as they go and don’t expect any help from the agency’s its there job to find personnel but if they don’t tax you they are liable " Any Work Via a UK Based Agency "

As far as going via a Umbrella company goes just look at the problems that liddelljohn is having at the moment under the topic " Poor Agency Rates! (Name & Shame Section!) " In my view its far better to go via a Non UK based agency , The choice is yours .

If you look back on archives on this site you will find this Topic has been covered .

Raptor

[K2]

Echidna

Look on HMRC’s website for details including the residential status test that the new ruling is set around. If the test shows you non resident then you get paid gross. For resident guys tax is taken at source but can be claimed back under the Seafarer’s deduction provided you fulfill the requirements for this.

Alternatively you could do what a number of UK agencies are doing, use a pay company like Armada to ensure you are paid gross. If you do this yourself it will cost you but if you use certain agencies they cover the cost for you.

😉

[James McLauchlan]

This is based on HMRC trying to stamp out what they term as ‘False Self Employment’
So, with that in mind, you can see why the rules are shaping up the way they are. The idea of not being employed (neither PAYE or operating under a Ltd co) is what they want rid of.

I’m reasonably sure that to be paid gross you would need to invoice the UK agency under a Ltd company. It seems, from an HMRC perspective, that the company does not need to be UK registered. I had this very discussion offshore (N Sea) with a colleague of mine (based in Asia) last trip. This is pretty much how he saw it also.

Currently it seems that UK agencies are wetting their pants at the changes, as 1)They were brought into force a year sooner than expected and 2) It does appear to put them on the hook for taxes if they get it wrong. This has made them overly cautious overnight.

For that reason I have been hearing (as in here-say) that UK agencies will only take people on if they are Ltd co or PAYE. Certainly that seems to be the case for work in the UK sector.

As for UK ex-pats with proven non residency living and working overseas for a UK agency, it would appear to HMRC as acceptable that you would be paid gross, but as suggested it’s a grey area that many UK based agencies will simply not take a risk on.

I do anticipate the list of agencies diminishing somewhat, over the coming years, as many realise that the quick easy buck they thought they were going to make might not be quite so quick and easy!

[deepseacon]

Some UK agents now require a LTD invoice even if you live in Asia to be paid its not a hazzle at all it costs around 3% of your day rate depending on the LTD ccompany you use and its tax free hazzle free.

Some agents will pay you gross if they know you have been out of the system for some time.

Just be carefull and it depends on how much the agent deals with the NON Resident Expats.

Its something you need to learn but one major agency told me they have some new forms to fill out but just stay clear of any documentation really for safest option LTD invoices are the way to go no details apart from name and bank details and your agents name not even need addresses.

Norway needs more clear information but many can still use LTD invoice and claim extra pay and still no deductions.

[liddelljohn]

Subserv told me that to pay an expat even for Non UK or non Norway work they would require new documentation , LTD company and confirmation of resident tax status in other countries and a letter confirming that staus
from HMRC !!!!!!!

(Borrocks to That )

each agency seems to be developing its own idas and policy at the moment ,,,i wont deal with some UK agencies anymore

Many UK agencies also seem to be leading the race to the bottom on dayrates in a beggar thy neighbour scenario……time for purge .

[deepseacon]

Well it was Subservpro.

Asking on the basis that i would need an NT code in the future and i said i dont need an NT code to work overseas if i am a NON Resident who does not have to file tax returns in the UK.

They sent one document regarding work in the UK thats all.

They never even had the other documents.

This is the agency who employs you from near oxford but sends you a contract from Guernsey in another company name as such and also pays you from an offshore account asking me to provide a NT Code for work overseas.

Now come on there office is in Banbury but my contract comes from somewhere else offshore based company and pays me offshore asking me to provide UK documents for TAX of which i dont need to?

Its a case of confusing the TAX issue so no one understands and then making it up for who ever’s benifit.

Why would an Offshore based company in Guernsey require my UK tax status to send me else were in the world?

When its been provided all ready and there is no documents as such to provide that you are a NON resident from HMRC as you could be taxable at any time thats why there is no such document to prove you are a NON resident to other outside of the HMRC.

Each company is supposed to check ones status from other matters like leases property documents bank statements and telephone bills if you say you live else were but hold certain passports.

[deepseacon]

Here is the document from Subservpro

About UK resident contractors as they had no other documents available last time i spoke with them.

This was sent in May 2014 i dont know if there is an updated Version or if they have NON resident versions yet.

tax_bulletin_uk_resident_585.pdf

Filename: tax_bulletin_uk_resident_585.pdf

Download

[Roy Simson]

Sorry deepseacon seems we both had the same idea !

Well like I have already said any x pats working via a UK based agency on any projects your asking for problems regarding tax . The agency will tell you any thing and you wont know a thing about it until they pay your first invoice.

Yes I have seen all the topics on the Subservpro web site , Its very clear that is a very gray area , All I do know is if they do not tax you they are liable .So the last thing when there trying to fill a requirement is tell truth , At best they will tell you " Don’t Worry your get the tax back "

Most of the work being on offer you can work direct or via any Non UK based agency’s , Just go through my list of agency’s on this site .

For those of you who have not seen the TAX BULLETIN on the Subservpro web site. Go to this URL http://www.subservpro.com/tax-bulletin/ the first item is " TAX BULLETIN 2: ON-LINE TAX RESIDENCE INDICATOR (TRI) "

This is addressed to you personally, as a UK national who is resident overseas ……….

……………………………………………………………………………………………
Even if you are living outside of the UK If you have " Any Attachments to the UK " Means you could be still liable for UK Tax . So "Any" UK based agency will tax you to cover them self’s

Raptor

[Richard Browne]

This is the problem for some people, proving that you are tax resident somewhere, and that you are paying tax somewhere..So what about the hundreds of guys based in SE Asia, and have lived there for years on tourist visas, some are not tax residents anywhere..They cant force you to be a tax resident of somewhere, unless you are a US citizen of course…although I can see other countries going the same way. Iam currently a tax resident of Australia, but not for much longer..Im sick of paying taxes here so planning a move to the Philippines, where I will not be a tax resident, and wont be paying any taxes to any country as I will no longer be a tax resident in Australia, because I will make sure of that before I leave..So what then, will the agencies never employ me because Im not a tax resident of any country…how ridiculous….as you say its probably better to say bye to the UK based agencies and work for one outside of the UK…less bullshit and hassle..

[deepseacon]

On Previuos conversions with the TAX office and some were only during 2013 there used to be no document they could provide to prove ones TAX status

I just tried this form from that link and it printed out a PDF that i was a NON resident with days visited and years listed in format.

So you wouuld think That the TAX office would allow Employers access to see ones Residence status at any one time as it can change very quickly.

Then allowing them to employ on overseas contracts with out any issue at all.

While i know there main aim is to stop Self employment but any one with a company can work for some one else thats the systems they brought in years ago free ability to trade and work.

[Roy Simson]

I think there are too many unknown variables and the agency will take the easy way out so they don’t get stuck with your tax .

Plus if you contact the inland revenue they will need your full details and in doing so your going to open up pandora’s box so best to leave sleeping dogs lie and go for a Non UK Based Agency .

At the end of the day the UK inland revenue wants there cut and forget all those Umbrella company’s just have a chat with liddelljohn regarding his .

The safest way is work via a Non UK Based Agency or Rov Company of which there are many .

Raptor

[deepseacon]

Well Subservpro can pay Gross payments on overseas placements now for NON UK TAX residents.

But UK and Norway work looks like there is still issues.

[James McLauchlan]

Hello, it`s a good post. Best regards, Banned.com

There! Try the link now 🙂

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