What should be your working status when you are overseas?

Working as a contractor outside the UK is not the same as at home. Even if you are working for a UK based agency and you can invoice them in the UK, it is rarely the case that it is legal to work in the same way as you do in the UK.

People will queue up to offer you advice but you should be careful about what you are told. Never trust advice if you only get it from one source and always seek advice for your own situation. Anything that I, or anyone else, can write about the general case may not be the best advice for you.

Agents will often give you advice or offer to set you up with some tax consultant or management company. Remember though, your agent is not an expert in general and will almost certainly not take the time to analyse your personal situation. Also, some agents may steer you to a particular company because they will receive a referral fee.

Consider what is the agent's goal when he advises you. He wants to get your signiture on the contract and your bum on the seat in the client's office. He will give you advice that maximises your income possibly at the cost of not being legal. He doesn't care if you are dragged into court two years hence. Nobody will make him refund the commission.

The specialist umbrella or management service companies will queue up to give you advice. Of course, they will give you advice as to how they can help you which is exactly what you would expect then to do. For this reason, it is important to speak to as many of these organisations as you can.

There are a few things that you can do to help you to make the correct choice. Let them ask you their questions about your personal situation. If they ask about just the length of contract, rate and duration then you should have great doubts. A good advisor will ask about your current work, marital status, children, what you might do after the contract and where your family will live while you are working outside the UK. All of those things do have an impact on the best way that you should work.

You should not simply choose the company that offers you the highest net from your contract. Suppose that you agree to work through a management company because they offer you the best net and that is all that you consider. Then, after a while you discover that in fact, their advice was bad and you want out. Suppose that their set up actually had you working illegally? You might find that you need to leave your contract and seek work in another country before you get caught. What if they then don't pay you all of your money? Who are you going to sue? You can hardly take them to court as that would involve incriminating yourself. Is this far fetched? At least one management service company does just this.

I'm also a little cynical about many of the articles that you see in the freelancer magazines. They are generally written by people from one umbrella organisation or another and oddly enough, they all seem to come to the conclusion that they offer the only safe way to work.

More detaila
Freelance Management Companies These are a popular way to organise your work outside the UK. There are some catches though!
Related areas
UK Tax Rules Read this to see how the UK laws affect you
Germany My guide to life and work in Germany
The EU What do the EU rules have to say about all of this?
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