A guide to becoming a contractor in the UK from abroad

We’ll give you some guidance as to how you can become a contractor or freelancer if you’re new to the UK.

Visas and Immigration

If you’re from the European Union, you can still come to the UK to work without a visa. Immigration rules after Brexit have not yet been negotiated and will not come into effect in any case for at least two years. If you wish to take on contract work in the UK, there are plenty of roles in need of skilled workers and professionals.

If you’re not a national of a country within the European Economic Area (EEA), or a national of Switzerland, you’ll have to get a UK visa. Information on the type of work visa you’ll need can be found on the government website, but it mostly depends on your level of professional skill and occupation.

UK visas work on a tier-based system. Two popular types of visas are Tier 5 and Tier 2. Those under the age of 30 from Australia, New Zealand, Canada, Japan, Monaco or Taiwan can apply for the Tier 5 Youth Mobility visa and are generally unrestricted in the type of work they can undertake.

Other types of visas require sponsorship, such as the Tier 5 Temporary Worker – Creative and Sporting, Tier 2 General and Shortage Occupation visas, and Tier 1 Entrepreneur visa. The latter type of visa may apply to you if you specifically want to come to the UK to run your own business or work self-employed, but eligibility is subject to conditions.

If you haven’t already worked out the entry clearance you’ll need, it is best to seek the advice of an immigration lawyer who can advise you.

Finding a Contract Role

Once you’ve researched the kind of entry clearance you’ll need as a migrant worker in the UK, you can look at the types of contract roles available to you, and more specifically the role you need to have to meet entry clearance requirements.

There are many occupations in the UK which are experiencing a skills gap, and businesses everywhere are in need of temporary skilled workers to fill these shortages on a contractual basis. Contracts can vary in length from a few weeks to a few years. If you’re new to the UK or looking to move to the UK, longer term contracts of a few months or longer will provide you with that extra bit of security.

Here’s an abbreviated list of shortage occupations in which there is a demand for personnel:

• Mining and energy: managing director, site director, programme director
• Civil engineering: geotechnical engineer, drilling engineer
• Electrical engineering: power system engineer, protection engineer
• IT: product manager, systems engineer in visual effects, software developer, games designer, cyber security specialist
• Medical: clinical radiology consultant, emergency medicine, nurse, paramedic
• Education: secondary maths, physics, and science teachers
• Creative: graphic designer, orchestral musicians, ballet dancers

As you can see from this shortened list, there are many industries and sectors which will likely have both permanent and contract roles available. Visit our blog for some free online tools that will help you in your contract search.

There are some recruitment agencies out there that specialise in helping expats find work, including contract and freelance positions. However, it is more than likely that you will need to find a longer contract in order to secure sufficient visa clearance if you wish to stay for a year or more.

Visit our blog on how to find new contracts for more information on finding contracts via recruitment agencies.

Once You Arrive in the UK

Once you arrive in the UK, you will need to get a National Insurance (NI) number and pay National Insurance contributions as a contractor if you will be earning over a certain amount. This applies whether you will be contracting as an employee of an umbrella company, as a self-employed professional or as a director of your own limited company. An accountant can help you determine what you will need in order to correctly pay NI contributions in the UK.

Getting Paid

Before you can be paid as a contractor, you need to decide which payroll option and business set up will be best. Your options include working through an umbrella company, working as a sole trader or becoming the director of your own limited company.

Umbrella company:

Working through an umbrella company is easy and straightforward, as the umbrella will register you as their employee for the purposes of you providing your services to a client. They will then handle all your tax obligations and pay you into a personal bank account just like a normal employee. Find out more about using an umbrella company.

If you choose to work through an umbrella company, you will need to open a bank account before you can be paid by your client or recruitment agency. To do this you will need proof of identity and recent proof of your UK address, which is usually an official letter or document such as a utility bill, a tenancy agreement or a credit card statement. A few banks may allow you to open a personal bank account without a proof of address if you’re new to the UK.

Sole Trader:

If you choose to contract as a sole trader, you have full control of your contracting business, you can keep all the business profits and set up is easy. However, you should know that agencies often do not want to deal with sole traders as the law requires agencies to deduct income tax and National Insurance contributions from individuals, which puts financial liability on the agency. Furthermore, as a sole trader you would be subject to unlimited personal liability for any debts of your business.

Whether setting up as a sole trader is right for you depends on the type of contractor business you wish to start. It also depends on the type of clients you will engage with and whether they would accept that you operate as an individual rather than a limited company. To set up as a sole trader, you must register your self-employed business with HMRC as soon as possible. Contact us for help setting up as a sole trader.

Limited company:

Becoming the sole director and shareholder of your own limited company is one of the most tax efficient ways to be paid. If you are not affected by a piece of legislation called IR35 – which determines your employment status as a contractor, based on your working circumstances – then you can take advantage of tax planning opportunities which yield a higher return than an umbrella company.

Contracting through a limited company allows you to legally minimise your tax burden and manage your finances with more flexibility. You do not have to be a UK citizen to form a limited company, nor do you have to yet be a resident of the UK to form one. However the company will need an official registered address in the UK, and you will also need this address and proof of it to set up a business bank account.

It is strongly advised to keep limited company finances separate from personal finances, which is why you should set up your business bank account after your company is registered and before you start trading. Setting up a limited company for contracting and getting it up and running is a lot easier with the help of an accountant if you are unsure of the process. Contact us to find out more about limited company accounting and to set up your company.

There are a variety of options out there for you should you wish to become a contractor in the UK from abroad. Follow our guide above, and should you have any questions or need any help from an experienced contractor accountant, we can help you get started in your new contracting or freelancing career in the UK.

Find out more about our services.