Now that international travel has become easier in the wake of the COVID-19 pandemic, even with the challenges of post-Brexit, working in the UK can still be an attractive option for overseas contractors.
Likewise, international contractors with specialist skills or experience are highly sought after for UK based projects as the economy recovers.
Assuming that all the prerequisite visas and work permits have been arranged, overseas contractors will need to know what their best options are for the manner and through which medium they are best working in the UK.
The UK tax system – what you need to know
Research into or advice provided to overseas contractors looking to work as employees in the UK will reveal that the UK tax system requires workers to pay income tax and National Insurance Contributions (NICS), through an employer here.
They will find that there are alternative models including self-employment and working through a limited company. Although these are viable alternatives in certain circumstances, most will be guided towards the use of a UK umbrella company.
What is an umbrella company?
A UK umbrella company is a third-party organisation which takes on the role and responsibilities of an employer.
A reputable umbrella company such as PayStream, through its partner agencies, has significant experience in helping overseas contractors when it comes to ensuring timely payment for work. It will take care of the weekly or monthly payroll arrangements, accounting for UK tax and NICs (the UK equivalent of Social Security contributions) in line with the tax regulations.
PayStream can guide overseas contractors through the UK tax registration process and provides general advice on tax obligations. It also offers bespoke tax advice for contractors who may have more complex needs relating to tax residence and domicile in the UK.
If you’d like a breakdown of all the benefits on offer when working through an umbrella company, click here to read our guide.
