Employed in UK by EU-based NGO with no presence in UK

by **Tihomir** on Tue Dec 20, 2011 1:01 am

Hello!

I've been providing services as a freelance consultant to an NGO based in another EU country for a number of years.

I am a UK resident and tax payer and conduct most of my work from the UK, with about 6-8 weeks a year working in the field mainly in the EU and other European countries. I've signed contracts and invoiced them, but have always been responsible for my own taxes in the UK, in the same way I pay taxes on my other consultancy fees.

The org now has a reason to want to make me an employee of theirs. I'd still be UK-based and do most of my work from the UK, but rather than a freelance consultant, I'd be their employee. The organisation has no office or branch in the UK.

I would be most grateful for any advice that would help us decide how to go about this. I guess I'd still pay most or all of the taxes in the UK, but don't actually know how and where to start finding out about this.

Many thanks!

by **pawncob** on Tue Dec 20, 2011 5:55 pm

http://www.taxationweb.co.uk/forum/german-employment-earnings-t29281.html?hilit=foreign%20employment

by **pjclar02** on Tue Dec 20, 2011 9:23 pm

Hello there

You can either set up a UK presence of the overseas employer and register this presence for PAYE, or you can register with HMRC for the PAYE direct payment scheme.

The PAYE direct payment scheme is the most simple option, as this does not require your employer to have a presence registered in the UK, and you can take responsibility essentially for operating your own PAYE and NIC. The overseas company will also have to pay employer NIC on your earnings, so you may need to make them aware of this!

Alternatively, if they are making you an employee then they probably think there is some running with the UK business, so they could commit to registering a presence in the UK - be it either a UK limited company or a UK Establishment. This entity can then be registered for PAYE in the normal way.

Depending upon what you personally are doing on behalf of the business in the UK, the overseas employer may be deemed to have a "permanent establishment" in the UK for corporation tax purposes anyway, which would mean that the UK Government would want some corporation tax on profits attributable to the UK operation! If your activities do amount to a permanent establishment, then it may be sensible to go straight for registering an entity - being either a limited company, or a taxable Establishment.

I hope this is of some initial help!!