PAYE, Self-Employed, Contractor or Other?

[SiH]

Evening all, a little puzzler here for you...
I'm based in the UK working for a Luxembourg entity on a Swiss contract and being paid a monthly salary in Euros. We don't have a UK entity in any way, shape or form and there are no plans to have one. The company is happy for me to either receive pay as an employed individual or I can set up a company of some description and receive pay into that. I don't believe IR35 would come into play due to the lack of UK entity but this is all rather new to me. Any idea what the pros and cons of each option might be? Incidentally I don't believe that employment rights would be too much of an issue as the company are happy to amend my current contract to reflect the same rights regardless of the entity being paid (if that makes sense!).

[Eric Mc]

Sounds like you are an employee.

The Luxembourg employer needs to register for PAYE in the UK and either administer the UK PAYE from Luxembourg (not advised) or appoint a UK based payroll agent to manage their UK PAYE and payroll obligations in the UK.

[JackCT]

SiH said:

Evening all, a little puzzler here for you...
I'm based in the UK working for a Luxembourg entity on a Swiss contract and being paid a monthly salary in Euros. We don't have a UK entity in any way, shape or form and there are no plans to have one. The company is happy for me to either receive pay as an employed individual or I can set up a company of some description and receive pay into that. I don't believe IR35 would come into play due to the lack of UK entity but this is all rather new to me. Any idea what the pros and cons of each option might be? Incidentally I don't believe that employment rights would be too much of an issue as the company are happy to amend my current contract to reflect the same rights regardless of the entity being paid (if that makes sense!).

I had this exact same issue recently with Poland and they ended up registering a UK presence to employ me and I went PAYE. I believe I even posted a thread on here about this.

I looked into sole trader but would breach the VAT threshold and also the contracting via a Ltd. I have, but personally i was concerned with the IR35 issue so didnt bother.

[bogie]

I did a 6 month contract direct to a German company, invoiced and paid in Euros. It was services only so no need to be VAT registered according to HMRC.

I was hoping it might lead to full time status for the company so never bothered to go LTD. I just did it as sole trader and kept the account simple via self assessment.

[Eric Mc]

bogie said:

I was hoping it might lead to full time status for the company so never bothered to go LTD. I just did it as sole trader and kept the account simple via self assessment.

That would have been fine as long as the arrangement was that you were operating as a self employed sole trader. If not, it was not correct.

[bogie]

Eric Mc said:

bogie said:

I was hoping it might lead to full time status for the company so never bothered to go LTD. I just did it as sole trader and kept the account simple via self assessment.

That would have been fine as long as the arrangement was that you were operating as a self employed sole trader. If not, it was not correct.

Yes, another plus point to doing it as self trader, I didn't want the extra admin hassle just for a 6 month contract.

[SiH]

Eric Mc said:

Sounds like you are an employee.

The Luxembourg employer needs to register for PAYE in the UK and either administer the UK PAYE from Luxembourg (not advised) or appoint a UK based payroll agent to manage their UK PAYE and payroll obligations in the UK.

Thanks Eric, the idea of appointing a UK payroll service was the route I was favouring; the idea of trying to be more 'tax efficient' by setting up a company or working as a sole-trader just seemed to be a bit onerous and fraught with risk. I just wanted to test the water to see if the notion of being a UK resident while working for an overseas organisation with no UK entity would somehow put me an a niche that could be exploited but it would also seem that the old adage about the only things in life that are certain are death and taxes is very true!