With international air travel largely resuming and borders reopening because “we just got rid of covid”, in the words from Tory peer and retail magnate Lord Stuart Rose, the prospect of contracting overseas has resurfaced, writes Chartered Accountant Kevin Austin, Managing Director of Overseas Contract Consulting Financial access.
The backdrop (can’t bear to repeat)
Less positively, under the terms of the Brexit deal between the UK and the EU, currently in force, it has not been possible for Britons (especially UK passport holders) to work freely in the EU. EU, unless they have registered to reside abroad during the so-called agreement period. ‘transition period.’
Unless you enter then, the previous freedom Britons had to work in up to 28 countries, as self-employed, has suffered a severe and irreversible blow. And it all struck just at a time when many UK contractors probably wouldn’t have bothered to walk away – to escape the clutches of HMRC’s non-payroll work rules for the private sector.
Umbrellas, flexibility and oblivion
Currently, a few UK entrepreneurs are offering the enticing idea of working in a more pleasant climate, with a better quality of life, often because the idea or experience of being employed in the UK through an umbrella company is, eh well, almost the opposite.
Well, if you have flexibility in your work and can work remotely, let us suggest you Cyprus, the Netherlands and maybe, if you like the idea of maintaining the adversarial relationship with the agents of the tax office that you probably maintained in the United Kingdom, in Spain.
In Cyprus, our advisor can provide employer referral services to Britons wishing to settle in Cyprus.
If you plan to leave the UK for more than an entire tax year, you can happily forget about UK tax and NICs – and your client can forget about the April 2021 no-pay rules, under which they can pay you as an independent contractor.
Top 10 Benefits of Relocating to Cyprus
The many advantages of settling on the third largest island in the Mediterranean:
- Personal income tax exemption of 50% for new Cypriot tax resident employees with an employed income of at least €55,000 (£46,300) per annum;
- Accelerated work permits;
- Spouses of third-country nationals who have obtained a residence and work permit in the Republic, and who receive a minimum gross monthly salary of €2,500 (not applicable for accompanying staff), will have immediate and free access to employment;
- Cyprus has a large British expat community and English is widely spoken.;
- A range of high quality English and private schools;
- Rental accommodation at competitive prices and available;
- Reliable and frequent flights to and from the UK, Europe and the Middle East;
- No IR35, no non-payroll rules;
- The possibility of obtaining an EU passport after five years;
- Generous tax benefits for expatriates and moderate taxation and social security.
Where else? As we have already explained, in 2022 there are only a few examples of countries where Britons can freely go to work or live after Brexit.
Netherlands not to be excluded if you are highly qualified
The Netherlands is a country to consider for entrepreneurs, especially since it has a long history of welcoming freelancers. Despite the country galloping inflation currently – and inflation was the whole point of Lord Rose’s comments (i.e. covid has been replaced by the equally widespread phenomenon of inflation), third country nationals, such as British, can apply to the Dutch authorities for a work permit for knowledge migrants. The KMW is an expedited work permit for highly skilled and well-paid foreigners. Could this be you?
If not in the Netherlands, Brexit-era Britons can live and work across the entire Common Travel Area (CTA), including:
- Great Britain,
- the Republic of Ireland,
- the Isle of Man, and
- the Channel Islands.
Pain in Spain…
Earlier in this article I mentioned Spain. But like most tax jurisdictions, Spain is stepping up its vigilance against taxpayers who fail to meet their obligations. the edge as the Netherlands and Cyprus do when it comes to choosing a destination to work abroad, Spain has only a board. And it’s pretty sharp in there!
In particular, the common reporting standard and information sharing between banks and governments across the OECD means that there are now fewer and fewer hiding places for contractors who evade their obligations. tax. In the UK, the Criminal Finances Act 2017 is being used to curb those who willfully aid and abet tax evasion in the UK and overseas, which is potentially a concern not only for entrepreneurs, but also for recruitment companies.
If you are an entrepreneur, your recruiter should also note that they may be exposed to the risk of setting up a “permanent establishment” abroad if they carry on a business and constitute a fixed installation due to the number of entrepreneurs they there may be in this country. Spain for example. Having such a permanent establishment may expose recruiting firms to local corporation tax (corporate tax) on profits attributable to their activities. And as entrepreneurs know, if their agency’s costs increase, agents like to try to alleviate any potential pressure by passing on that cost!
Finally the umbrella of your dreams
If it’s the Mediterranean you’re looking for, and given that there are over 300 days of sunshine, it’s hard to see Cyprus as a hotspot for discouraged British entrepreneurs. Along with the 10 other reasons outlined above to consider the country, what’s not to love? In Cyprus, you will find that the only umbrella you are under is the one on the beach!