Would an IT freelancer who wants to work overseas have more options as a UK employee?

Having explored the options if you want to work abroad as a UK technology freelancer, it seems appropriate to now look at the routes into overseas working if you were a UK employee.

After all, freelancers often switch from self-employment to employment, and since IR35 was reformed, many IT contractors are now on the payroll at recruitment agencies, umbrella companies and even end-user organisations themselves, writes chartered accountant Kevin Austin, managing director of Access Financial.

Three main routes to work abroad as a UK employee

Broadly, you have three options in the instance that the lure of overseas employment is too strong to resist and you, a UK citizen permanently employed here, wish to work outside the UK: 

1. Ask your employer to transfer you to an overseas office. This is the most straightforward option. Nevertheless, transferring abroad may not be possible if your employer does not have an overseas office, or if there are no open positions in the overseas office.
2. Find a new job with an overseas company. This can be an excellent way to experience a new culture and meet new people. However, finding a role with an overseas company can be challenging if you do not have experience working overseas. You may also need to obtain a work permit or visa, depending on the country where you are currently working, such as the UK.
3. Work remotely for your UK employer. This will be a good option if you have a sound relationship with your employer, and they are willing to let you work remotely – which you’ll need to specify may be outside the UK. However, you will need to consider the tax implications of working remotely, as you may be liable to pay taxes in the UK and the country where you work.

Working overseas since Brexit (isn’t for the faint-hearted)

Not so long ago, working outside the UK as a Briton wasn’t so complicated or restrictive.

Since ‘Brexit’ on January 31st 2020, UK nationals do not have the right to free movement that they enjoyed before.

To work in the EU/EEA, you will need a work visa to work throughout the EU/EEA. As the UK is now categorised as a ‘third country’ under the Brexit agreement, UK nationals have no more — or fewer — rights to work in the 30 EU member nations than any other ‘third-country’ national. 

Fancy working in the Common Travel Area?

The other big result of Brexit for UK nationals, is that such individuals are free to work without a work visa in only the so-called ‘Common Travel Area.’ The Common Travel Area includes the Republic of Ireland, the Isle of Man, and the Channel Islands. 

It should be acknowledged that contractors who feel the desire to work overseas, don’t often have those three in mind, despite the job opportunities in these three still being worth exploring.

The main thing which UK staff wanting to work abroad might not appreciate is that if you want to be employed abroad – on the same full-time basis as you are in the UK, your prospective employer will need to sponsor your application and apply for a work visa for you. 

How long does a UK employer sponsoring a visa application take?

Work permits can vary in the time the authorities take to issue them.

Our experience is that the time can range from two to six months.

Some countries, such as the Netherlands and Cyprus, have fast-track procedures for persons meeting specific skills and salary criteria. In most other countries, it is, I am afraid, a question of joining the queue.

Let’s talk tax — if working outside the UK as Briton

But what about tax if you want to work abroad as a UK employee of a UK organisation?

Well, you are subject to UK taxation on your worldwide income if you are a UK resident, and this means that if you work abroad, you may well face being taxed in the country of work and back home.

To avoid liability to UK tax, you must leave the UK for a complete tax year (April 6th until the next April 5th) for work. If you meet this condition, your income tax will be due only in the work country. Most employed workers will be paid their salary subject to the local tax and social security withholding, as is the case under PAYE in the UK.

Employer and HMRC considerations

If you can arrange for your employer to post you abroad, generally for up to 24 months, and with the intention of returning you back to the UK, this can be a fail-safe option.

If this option interests you, the usual course is to obtain from HMRC, Form A1. Completing this form (and having accepted it by HMRC) means you can continue paying your NICs in the UK, rather than where you work, and your foreign employer is based. 

As is hopefully clear from even just this brief overview of working abroad as a UK employee, the tax implications of a job overseas; informing HMRC of your intentions, and then registering yourself in the work country, are complex, and differ from country-to-country. (N.B. In most countries, a foreign worker must register with the local town hall or the police station and this is usually a mere formality, and there may be a nominal charge).

You should therefore seek expert advice in the UK – and ‘on the ground’ where you plan to work — to avoid problems with the various tax authorities. 

Don’t overlook National Insurance a.k.a. Social Security

One thing to ask your advisers about is social security.

Known in the UK as National Insurance Contributions (NICs), social security is another complicated area. The usual rule for UK employees regarding NICs is to pay social charges in the work country.

You may potentially avoid this however, and could potentially continue to contribute in the UK, provided you apply to HMRC for an A1 certificate of coverage issued for up to 24 months.

Five top tips if your mind’s made up that you’ll work overseas in 2024

 Penultimately, here are some practical tips for working overseas as a UK IT full-timer: 

1. Talk to your manager. The first step is to talk to your manager about your desire to work overseas. Your manager may be able to help you find a way to ‘make it happen,’ such as transferring you to an overseas office or allowing you to work remotely.
2. Do your research. If you are considering working for an overseas company, studying and learning about the company culture, salary expectations, and work-life balance is essential. It would be best to research the cost of living in the country where you are considering working, too.
3. Explore so-called ‘Digital Nomad’ visas. And whether the country you’re eyeing offers such a visa. You should be aware nomad visas are intended primarily for self-employed people, but there is no reason that UK employees who want to work abroad (where they will remain employed) cannot potentially use them. The key feature of a nomad visa is that it does not require a local sponsor. The eligibility criteria varies, from country-to-country, but usually central to qualifying is salary levels. Typically, with nomad visas, most, if not all, the income must derive from outside of the country issuing the nomad visa.
4. Network with people who have worked overseas. Networking with people who have worked overseas (ideally in the same country as you’re eying) can be a great way to learn about their experiences and get advice. There are several online and offline networking groups for people who have worked overseas.
5. Be prepared for the challenges of working (and living) overseas. Working overseas can be a rewarding experience, but it can also be challenging. You must be adaptable and willing to step outside your comfort zone. You may also need to learn a new language and culture, especially if you’re leaning towards the 24-month stint outlined above.

Lastly, here’s my final know-before-you-go…

Very finally, if you are serious about working overseas, I encourage you to start planning early. It would help if you did several things to prepare, such as researching the host country’s jobs market, learning about their immigration requirement, and saving money for your move. Good luck!