Tax questions regarding freelance work in the UK?

*Yellow*

Hi everyone,

I was hoping someone here might have the knowledge and experience to give some advice/information regarding taxes/freelance!

I have recently graduated and started up my own freelance business, so I'm very new to everything it involves!

My scenario here is that my business (sole trader type of business) is registered in my home country, Sweden, but I've just found out that I've gotten a 3-month freelance contract working on location in the UK (but billing them from my Swedish business naturally).

I pretty much live on-and-off in the UK (this is where I've previously studied) and on-and-off in Sweden, but I see my home country as my main country of residence, and that is where my business is registered, so that's where all my taxes should be paid, right? At least that would definitely be the case if I did the freelance work for a UK client sitting in my flat in Sweden...

However, is it different if I'm actually located in the UK for the 3 months?
There seems to be some kind of rule about how many days you're working in the country etc, but I'm not sure exactly how it works and if it applies for people whose businesses are located (and taxes normally paid) in another country?

I have been reading about UK taxes vs Swedish taxes and it has left me so confused. I obviously don't want to be double taxed (although there seems to be some kind of double tax agreement between EEA/EU countries but I'm not sure how it works?), but I am at loss regarding which country the taxes should go to in the first place! It seems both countries want my taxes?
Obviously if I'm billing the company from my Swedish business, the money will go to my Swedish bank account, and the Swedish government will want taxes on all those earnings.

I would be very grateful for any advice! I'm loosing sleep at the moment and feeling very anxious about doing something wrong and then getting billed/fined from either of the countries about taxes not getting paid, if I'd pay them to the "wrong" country..

Many thanks for any help.

Prothet_of_Doom

Most freelancers in the UK work via a ltd company or via an umbrellor company. If I were working in Sweden, my ltd company would invoice the swedish firm, and the sale would be treated like any other export.

Is your issue that you are self employed rather than a company ?

In which case using an umbrellor company might work, but wait. It is a company, so just invoice the UK company.

*Yellow*

Prothet_of_Doom wrote: »

Most freelancers in the UK work via a ltd company or via an umbrellor company. If I were working in Sweden, my ltd company would invoice the swedish firm, and the sale would be treated like any other export.

Is your issue that you are self employed rather than a company ?

In which case using an umbrellor company might work, but wait. It is a company, so just invoice the UK company.

Thanks for your reply!

Hmm, I'm wondering if being self-employed is different in the UK and some other countries? I am self-employed yes, but back home I had to register myself as a business to do that (so I have a company name, company number, VAT-number etc). There are different types of businesses at home too, and Ltd company would be a bit more complex than the self-employed/sole trader company, but it's still a company. Is that the case here in the UK too, that you become a company when you register as self-employed/sole trader? Wondering if there might be differences in that area that is making it so confusing for me to find the answers to my tax questions!?

dshart

Below is a link regarding the double taxation treaty between the UK and Sweden. I think article 14 may be applicable in your case

http://www.hmrc.gov.uk/taxtreaties/in-force/sweden-uk-double-taxation.pdf

Savvy_Sue

I would try to find a good accountant either in the UK or in Sweden who has experience of people who may work in more than one country - ideally someone who knows both the Swedish and UK systems. An expat forum might be the place to start looking ...

Prothet_of_Doom

In the Uk, the basic difference between Ltd company, and self employed, is one of taxation and liability.

The director of a ltd company gets a portion of income via being an employee, on PAYE for tax and NI, and a portion as dividend, from the profit which will have had Corporation tax paid on it. He has no personal liability for the debts, unless he broke the law, or has given a personal guarantee. The director also registers for self assessment, due to the dividends.
Some contractors work via an Umbrellor company where a management company does all the paperwork and makes money from knowing the rules.
Then there's self employment, where you register for self assessment, and are liable personally for the debts. You can be Vat registered, register as an employer, and have public liability insurance like a ltd company, but you are not a company.