Freelance Overseas Limited

Q. Is Freelance Overseas an employment agency?

A. No, Freelance Overseas does not recruit on behalf of clients nor does it find work for contractors.

Q. Is Freelance Overseas an Umbrella Company or Composite Company and do recent changes in tax legislation affecting such schemes come into effect?

A. No, Freelance Overseas is a Self-Employment contracting service for clients to engage contractors, who legitimately pay their own Tax and National Insurance in the United Kingdom.

Q. Who is responsible for paying the contractor’s Tax and National Insurance, and is there a difference in how much Tax and National Insurance is paid?

A. The contractor as a Self-Employed individual is solely responsible for paying their Tax and National Insurance contributions, being Self-Employed makes a big difference to their Tax affairs.

A Self-Employed person is taxed on income completely differently from an employee. Their income for tax purposes is the difference between their total incomes less business expenses.

This is declared to HM Revenue and Customs on what is known as a Self-Assessment Tax Return. 

Self-Employed people pay Class 2 National Insurance contributions. In addition, if their taxable profits are above a certain figure they will pay Class 4 contributions. There is no liability for Employer’s National Insurance contributions.

Q. How does the contractor get paid and what are the costs?

A. The contractor agrees with the client the amount of income due for work undertaken during the billing period.

At the end of the (week / month / contract) period, the client or contractor submits timesheet and we will generate an invoice and send it to your Agency / Client for payment plus VAT.

The client then pays this invoice by direct credit to our company bank account where the funds will be identified and matched to the appropriate invoice.

On receipt of payment from the Client / Agency, Freelance Overseas will make immediate payment by direct bank transfer for the equivalent amount due to the contractor less our 4% charge of the net value of the invoice before VAT or a minimum of £30.00 whichever is greater. 

Q. How quickly would I receive payment?

A. Freelance Overseas will process all payments to contractors within one working day of receipt of cleared funds from your Client / Agency. Payments from Freelance Overseas are processed FREE OF CHARGE! (3 – 5 days depending on currency)

Q. Do I have to sign a fixed term contract with Freelance Overseas?

A. No, There is no fixed term contract; the contractor can terminate the arrangement at any time.

Q - Who is responsible for paying the contractor's Tax and National Insurance, and is there a difference in how much Tax and National Insurance is paid?

A. Contractor's must register as Self-Employed with HMRC within 3 months working through Freelance Overseas. Registration can be done by telephone, the HMRC Self Assessment Helpline is 0845 9000 444. Contractors must also register for VAT (click here to register online) if their turnover is greater than £67,000 per annum. 

Q - Is Freelance Overseas legal?

A. Freelance Overseas works entirely within United Kingdom & Isle of Man law, the solution is legal. Contractors pay their Tax and National Insurance due by way of Self-Assessment as legitimately Self-Employed individuals.

Q. Is Freelance Overseas a tax avoidance scheme as far as HMRC is concerned?

A. No, the structure conforms to all of the relevant tax rules and will reduce each contractor’s Tax Liability substantially. The contractor must complete their Self-Assessment form and submit this to HMRC on time. Freelance Overseas conforms to all HMRC legislation.

Freelance Overseas is not a Managed Service Company (MSC)and functions only as an intermediary limited company therefore contractor's are considered by HMRC as being legitimately Self-Employed in the United Kingdom. Our contractors are not issued shares or receive dividends to avoid paying National Insurance Contributions and regardless of the contract status, IR35 regulations do not apply.

Agencies, during the due diligence process, should receive the Certificate of Incorporation, VAT Certificate and the company's Bank details to conform to regulation.

Any further regulation by the agency is Self-Imposed.

Q - My agency has a policy of not dealing with an offshore company, what can I do?

A. Mistakenly some agencies have assumed they might be in breach of legislation because Freelance Overseas is an Isle of Man incorporated company.

The Managed Service Company (MSC) legislation (April 2007) and the 3rd Party Debt Transference legislation (effective from Jan 2008) mean that agencies are now liable for unpaid Tax and National Insurance contributions. As a result, they are rightly undertaking due diligence to ensure that they are not at risk.

Once agencies understand that Freelance Overseas is not an Managed Service Company (MSC) and there will be no risk of 3rd party debt transference, they are happy to begin working with us.

The legislation targets firms who provide schemes for contractors to evade tax. Every agency exposes themselves to HMRC penalties and accrued interest for each and every one of their contractors who evade tax payments.

Avoid risk – Freelance Overseas is an intermediary limited company therefore contractors are considered by HMRC as being legitimately Self-Employed in the United Kingdom.