Staying Above Board in a Global Economy
The world of work is getting smaller. With the increasing use of technology to link business people across the globe, working outside your own country can be as simple as setting up a conference call and emailing your products to your client.
The beginning of a contract may come with a long-distance relationship, but as you and your new client work more closely together, there may come a point when you need to work with your client in their own country and travel overseas to complete the job you’ve signed up to deliver.
By taking on contracts from overseas, contractors potentially open themselves up to a range of financial and tax issues. However, this shouldn’t stop you from moving into overseas markets and seeking clients wherever there is work for you.
Eligibility to work
When travelling abroad to work, there are a number of issues that you will need to take into account. Depending on the part of the world where you’ll be working, there are different regulations about travelling, working and how long you can stay.
Working in the European Economic Area is a relatively straightforward prospect as there is freedom of movement amongst member states for people to live and work as they wish. There is no requirement to apply for a permit or visa to work in any EU country or in Norway, Iceland or Lichtenstein. This can significantly simplify the process of working within a country rather than working remotely for a client from a base in the UK.
Work in all countries outside Europe is likely to require a permit and relevant visa. If you try to start work without the relevant documentation, you risk being deported. It makes sense to seek expert advice on the requirements in the country where your client resides before starting work to keep you on the right side of the law.
Tax status
It can sometimes seem that tax affairs of purely UK-based contractors is complex enough, but adding an international dimension can further complicate matters. Whether or not you need to pay UK tax on earnings made overseas will depend on a number of factors.
Seeking advice before taking up an overseas contract where you will leave the UK to work in the country where your client is based will help you to plan for the allowances you need to make in terms of taxation. The duration of your contract, your usual base of operations and how long you will be spending out of the country will all have an impact on how HMRC treat your earnings with respect to tax.
Healthcare, welfare and insurance
If you are working in an EU country, as a citizen of an EU member state you will receive the same welfare and healthcare benefits as those offered to citizens of the country in which you’re working. If you were to fall ill whilst in a European country, you would receive healthcare in the same way as anyone else living in your host nation. If your contract takes you to any country outside Europe, you will not receive state benefits or healthcare if you are taken ill during your stay.
Even if you are able to access hospital care equivalent to that of any other resident of your host country, the benefits you receive will not enable you to return to the UK without incurring significant costs. Whether you’re working in the EU or a country where reciprocal healthcare benefits are not provided to foreign nationals, it makes sense to have comprehensive insurance to ensure that if you are taken ill you can return to the UK for your care, if that’s what you would prefer. Seek specialist advice on insurance for business travel to make certain that you are covered while you are abroad and to get you back if necessary.
Conclusion
As with all matters relating to your business, it makes sense to seek specialist advice as early as possible when considering taking work overseas to make sure you don’t fall foul of laws on taxation or end up stranded abroad with no way to get home.
