The UK’s exit from the EU, which took place on 31st December 2020, has some ramifications for self-employed contractors working across the border. Whether you’re a self-employed UK contractor working in the EU, or from an EU state and working in the UK, in this article we’re looking at what you need to know. We advise you to seek expert local advice for the country you’re working in.
UK contractor working in the EU
If you were legally working in an EU country before January 1st 2021, your right to work in the EU is protected by the withdrawal agreement. Otherwise, the same rules will apply in Europe as in the rest of the world.
Travelling in the EU
UK nationals travelling in the EU, may need to make extra preparations that were not required before Brexit, such as:
Checking if you need to renew your passport
getting travel insurance that covers your healthcare
checking you have the right driving documents
Obtaining a work permit
You’ll need a work permit to operate in most EU countries. The UK Government has published guidance, but you should also seek local advice in the country you intend to work in.
Work permit applications usually require a “job offer” which would presumably come from the recruiter or end client. It’s likely that you’ll either need to register locally as self-employed in the EU country, or become an employee of the end client or alternatively consider using a specialist Umbrella company such as our partner International Umbrella. Your Orange Genie accountant can refer you to discuss your circumstances.
Professional Qualifications
If the services you provide are regulated and require professional qualifications, you will need to ensure your UK qualifications are recognised by the relevant EU regulatory or professional body. There are similar requirements for EU professionals needing to get their qualifications recognised in the UK.
Self-employed UK contractor, Tax and NI Position
The Double Tax Treaty regime and tax rules were bilateral agreements agreed between countries, rather than EU law, and as a result they should not change. This means that you should still only pay tax once in one territory and will be given credit for any tax paid elsewhere. Your tax advisor should be able to assist with this.
A1 Certificates
Before Brexit, a UK national could remain part of the UK social security system, paying contributions here and evidencing this through an A1 certificate. Current A1 certificates will remain valid until their expiry date but in future a UK national working in an EU country will be expected to pay local social security payments.
“Detached workers” working in the EU for 24 month or less, can apply to HMRC to pay UK National Insurance Contributions. At the time of writing, it has been informally confirmed that all EU member states will opt into the rules for detached workers, but again you should seek up to date local advice when considering the contract.
Further guidance and links to the forms can be found here.
VAT: UK Contractor Supplying Services to the EU
If you’re VAT registered, the rules applying to the supply of services between the UK and EU companies are the same as the rules for supplying services from the UK to the rest of the world.
The Business to business ( B2B) general rule applies so that the supply is made where the customer belongs. Commercial evidence that the customer belongs outside the UK should be retained. For EU customers their VAT registration number is good evidence.
UK Contractor reclaiming EU VAT
Before Brexit, you could recover VAT incurred in other EU countries using an electronic system, but this is no longer available. You can continue to reclaim the VAT from EU member states but you must do this using their existing refund system. The process varies across each EU country so you will once again need to seek local advice in each EU country where you incur VAT.
If you have questions or if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com.