Joanna had been contracting in the UK for many years before taking up a contract with a British agency to work as a consultant with the European Space Agency in the Netherlands.
Joanna simply assumed that she could continue to operate through her existing umbrella provider.
The service charged £35.00 per week and the company confirmed it would be happy for her to continue. Asked about Dutch taxation, the adviser said they would account for UK taxation as that is all that was required of them.
Joanna arrived on site to be requested by her client to show them a copy of her A1 and Bergernummer which left her very confused.
Luckily, another British contractor on site advised that he used I-PAYE’s European Umbrella Company and suggested that Joanna contact his dedicated account manager who revealed that an A1 used to be called an E101 and the Bergernummer was a Dutch tax identification number.
Joanna happily signed on to I-PAYE’s European Umbrella Service safe in the knowledge that she was not building up a potential problem in either the Netherlands and/or the United Kingdom.
Best Advice: European Umbrella
Reason Why: The services were to be performed at the premises of a Dutch client.
While the A1 would mean that UK National Insurance was still payable, the Dutch authorities would have the first taxing rights on the salaries paid even if through a UK-based umbrella. In addition, due to the scarceness of skills, it would be possible and preferable to seek to be taxed only on net income after accounting for a right-off of 30% of her income to cover the extra cost of living in the Netherlands.
Service Cost: A fixed fee agreed in advance based on the contractor’s unique circumstances. Fees range between £250 and £525 per calendar month.