Working overseas as a UK freelancer

[SteveErrey]

Hi

I have an opportunity to work with a major company in my industry based in Amsterdam for 6 months. I have a Ltd company here in the UK and while they're keen to get me on a pro-rata salary I think I'd rather keep invoicing from my Ltd company based on my daily rate.

I know there are safeguards in place to ensure I don't pay tax in 2 places, but I have no idea what the tax implications are in reality - am I obliged to pay Dutch taxes if I'm living and working there, and if so what happens with the revenue generated into my Ltd company?

Anyone with any experience or who can point me in the right direction is very much appreciated.

Thanks
Steve

[Paul Mason]

Dear Steve,

It’s as much as we can do at Abbey Tax to keep up with UK taxation! Nevertheless, we can give you some general pointers on the taxation issues for working overseas.

Six months living and working overseas is not long enough outside of the UK to break your UK residency for tax purposes (you have to go for a complete tax year) and so you would still be liable to UK tax on your worldwide income.
Depending upon how you are planning on pay yourself, i.e. salary or dividends, you could be paying tax on your salary in the Netherlands, but not on your dividends.

If you will be paying yourself a salary then you can obtain an E101 certificate from the UK tax authorities to carry on paying UK national insurance and not have to suffer Netherlands equivalent social security contributions.

Furthermore, if any of your earnings are taxed in Netherlands you will get relief in the UK on this, but relief will be capped at the maximum amount of UK tax that would be levied on your income here.

My colleagues have researched the matter a little further and came across a website:

International Tax Consultants, Capital Consulting : Tax Planning for contractors & freelancers which appears to suggest that if your company is seen to be carrying on a business from within Netherlands, it might have to pay corporation tax there; however, you should also be able to claim double tax relief here in the UK. There is also an indication that there may also be a requirement for you to set up a payroll in the Netherlands and again this is mentioned in this website.

We really cannot comment upon the veracity of the information, but If you follow the web link: Why cant I continue paying taxes through my Limited company? : International Tax Consultants, Capital Consulting : Tax Planning for contractors & freelancers there is more commentary and this may explain why the Dutch company may be keen to engage you on a salaried basis.

I am sorry we cannot help further, but I believe you will need to do a little more research and perhaps find a UK accountant who specialises in Dutch tax or a Dutch firm that specialises in overseas contractors working in the Netherlands who can answer your specific query.

Paul Mason

Abbey Tax Protection