Some of the most common questions we are asked are answered below.Regardless of what work you do in the UK, you will have to pay Income Tax and National Insurance (NI).The trick is making sure you are using the best options to maximise your income whilst here.
When working as an IT Contractor, you will need to engage the services of a Limited company, sometimes called an Umbrella Company to manage your invoicing, credit control and wages.Legally if you are working on a Working Holiday visa, you are NOT permitted to open or own your own company, however if you are working on an HSMP visa you are entitled to do so.
Whether you do or not is dependant on the cost vs hassle factor and end benefits.In real terms, unless you are turning over in the region of £50 000 per year or more, there is no real financial gain to running your own set up when compared against the Limited Co offerings we have for you.
Ltd Company vs. PAYE earnings
Keep in mind that how much you earn will depend on the way you are paid.There are a variety of schemes in the UK that allow you to legally maximise your take home pay, and a few that are not quite so legal.Be sure your Limited Company operates within IR35 tax law for self-employed people; otherwise you are the one who will suffer the fine when caught as well as have to pay in the short fall, not the Limited Company Service Provider.
DIVIDEND SCHEMES are legal, and pay the bulk of your income in the form of employee dividends, which are taxed at a lower rate, with no NI contributions. Full expense claims within law are permitted to lower your taxable income.Payment monthly with a detailed salary advice form.
PAYE schemes work with the standard tax tables, and allow you to your expenses to lower your taxable income. Simple and efficient, but only up to a certain value, then they tend to become tax inefficient.
Running your OWN LIMITED CO is only available to those who are NOT on a working holiday visa.You must ensure you register and set up the company correctly, and learn the IR35 tax laws in the UK.As a contractor, you would be advised to have the services of a lawyer as well as bookkeeper or accountant for your monthly returns and final returns.The UK tax department is very up to date and quick off the mark.
A few Limited Companies offer High Income Services, where you partly run you own company and they provide some of the services, keeping costs and hassle factors low.
Tribe Associates can offer IT Contractors all of the above services, dependant on the individuals earning power and visa restrictions.Should you want more information of the Limited Company Services on offer, please send an email to enquiries@tribeassociates.com with as much details and information that you are able to provide and we will revert as soon as possible.
What can I Earn?
Income is very much based on your skills, experience and where in the UK you are working.Keep in mind jobs in London pay a bit more, but the cost of living there can easily outstrip the benefit.Being flexible regards your location, and working outside of London can pay good dividends in terms of not only your income, but also seeing other parts of the UK.Your first contract will most likely not be at optimum rates, but your second one most surely will be.IT Contracting pays easily 30% over the top to permanent work. The big thing to remember with permanent work is there is no chance for tax efficiency to be gained, you have a boss restricting when you can get away for a break, and you are confined to using only those technologies the company currently employs, with no chance of improving your skills and experience outside of these. No change from home and the current job then.
As a very broad guide, contracting in the Services sector i.e. Help Desk or Support will range from £12 to £25 per hour.Specialised sectors like Developers and Engineers would range from £30 to £40 per hour, or more dependant on the skills set, specialisation and current demands.
Tribe Associates is happy to provide you with detailed information specific to your current skills and experience.You will need to send us your up to date word document CV and we will reply.Please include in your email as much information regards your plans, your legal status, where you are willing to work and when you are hoping to arrive in the UK so that we can provide you with accurate information.
You probably have heard that it is very difficult to open a banking account in the UK.No lies there.Money laundering rules make it difficult to say the least.A few tips to make life easier for you are:
A popular option is to buy a bank package prior to leaving home.HSBC do one that you set up in South Africa, and initialise once here in the UK.The costs of the package may vary, and you could be getting unnecessary items in the package that you can sort out once here cheaper.
If you want to save money and open an account in the UK for free, Tribe Associates can do this for you.We have an arrangement for those who use our services to go to the UK and work as IT Contractors, where we ensure you will get your HSBC banking account in the UK at no charge, and as soon as possible.Please make sure you let us know if you require this service before you depart so that we can arrange things for you in advance.
Mobile Phones (cell phones)
You will not be able to buy a mobile phone contract when you first arrive as you will have no credit history, but can easily buy a sim card and use Pay as you Go top up packages to start with.
Bring your handset from home, as you don’t need the additional cost of purchasing one, you can get it unlocked for all networks at home or in the UK.
The cost of a sim card is currently £10.00 from Virgin or Orange, £7.99 from O2 or £12.99 from Vodaphone.Simply top up your minutes from almost any banking auto teller, or buy top up cards from various retailers on the high street.You can keep your number when you eventually decide to upgrade to a contract, irrespective of network, as they will transfer across networks for you at no cost.
Travel Insurance
There is such a wide array of insurance available that it is easy to get confused, or end up being Over Insured, if there is such a thing.Travel accident insurance if you are going over to Europe is very cheap from within the UK, anything from as little as £5 for a single trip.
Then there is the lost baggage insurance, the cancelled flights, the missed flights, special activities insurance incase you go skiing or engage in dangerous activities like a trip to Amsterdam!
Phew !
TIP ..Most credit cards will offer you FREE or hugely discounted travel insurance if you buy your air ticket on your card!Check first before you buy a separate policy.
Medical or accident cover is very important, so double check what your policy is covering.Whilst any emergency treatment in the UK will be carried out by the NHS automatically, you may be asked to prove your current employment status to prove you are entitled to this treatment for free.
Buy travel Insurance sufficient for your needs, and not what you are being sold by punters.
“Under current Regulations, anyone engaging in employment with an employer in the UK, or is a self-employed person whose principal place of business is in the UK, is fully exempt from National Health Service (NHS) hospital charges in England. This exemption applies to your spouse and children (under the age of 16 or 19 if in further education) if they are living with you in the UK on a permanent basis.
Please note to be exempt from NHS hospital charges on this basis you must be in employment at the time you receive treatment. If you are here on a work visa but currently unemployed you will be charged for your treatment. You will have to pay statutory NHS charges, eg prescription charges, and will have to go on to waiting lists for treatment where appropriate.”
