How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3117
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I was working in the UK UK company owned by a Dutch holding

Customer Question

I was working in the UK for a UK company owned by a Dutch holding company. The UK company has been sold but it has been agreed that I will now work directly for the Dutch holding company and be employed by the Dutch company. I will work approximately 50% in the UK from a home office and for the other 50% I will be travelling to many different countries but mainly in Europe.
The Dutch company will withhold tax and as this is higher than in the UK it will be declared in the UK but I will not have any additional tax burden. There is no additional social security costs for me as an employee as the Dutch tax rate at up to 52% is all inclusive.
The Dutch company will pay social security costs in Holland. The question is do I pay employee NI in the UK and does the Dutch employer have to pay employers NI in the UK. I have spoken to HMRC and have been told that I must write to Newcastle and can expect an answer in 10 weeks. As my employment will change as described from 1 April I need to know sooner.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I'm Keith and happy to help you with your question. The news I bring is far from good, I regret.
You are well and truly caught by Benjamin Franklin's dictum that in life there are but two certainties, death and taxes. You will be taxed on your world wide income in the UK as you spend over 183 days in each tax year here and Dutch tax is higher. Although the Double Taxation Treaty between the UK and Holland precludes the same income stream being taxed in both jurisdictions, it does not protect you from variations in tax rates.
Now as for social security payments take a gander at this UK Gov web site:
https://www.gov.uk/national-insurance-if-you-go-abroad
You will see that Holland is not one of the countries with a bilateral Social Security agreement with the UK and whilst you may be building up entitlements under the Dutch system you will have dipped out under the British. You can, of course, make voluntary contributions viz:
'Voluntary contributions
If you’re eligible you can pay voluntary National Insurance contributions that go towards your State Pension and certain benefits and allowances if you return to the UK.
Voluntary National Insurance contributions paid from abroad don’t cover your health insurance in the country where you live.
Apply to pay voluntary National Insurance
Contact HMRC if you want to check your eligibility.
Read leaflet NI38 and fill in form CF83 (found at the back). Send it back to HMRC using the address on the form.'
This will land you with even more expense when involved with a country will high taxation levels already. I would suggest that whilst awaiting a decision from Newcastle, that ylu must make voluntary contributions to protect your State Pension. Unfortunately the Dutch company is under no obligation to meet UK NI costs, it is already so doing under Netherlands protocol.
I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.
Keith
Many thanks. For taxation I am fine as I know the position and can speak to my employer about equalising the difference.
It is only social security that concerns me. If I have understood correctly then
1. Under no circumstances will the Dutch employer be responsible for paying employers NI in the UK.
2. I can make voluntary contributions in the UK to protect my pension position.
3. Do you know the likely range of responses from Newcastle will be as I am in the dark with regards ***** ***** it is employers and employees NI as point 1 above seems to be clear if I hsve understood correctly.
Thanks
Expert:  bigduckontax replied 1 year ago.
Well I have had few dealings with Newcastle over the years, but have always found their staff very knowledgeable and helpful. You could try telephoning you know, but they might not be drawn on complex matters.
You appear to have grasped the Social Security position completely, you have it to a T. The Dutch employer will almost certainly adopt the position that they are constrained by Dutch employment law and have no duties or responsibilities under British.
Please be so kind as to rate me before you leave the Just Answer site.
Customer: replied 1 year ago.
Keith
Many thanks. However, I would just like to understand the likely range of responses from Newcastle (they said they will only deal in writing). what would be the best case and worst case positions they can adopt ?
I will be pleased to give you an excellent response once we finish as your responses so far have been at that level.
Thanks
Expert:  bigduckontax replied 1 year ago.
I do not anticipate much difficulty. I am of the opinion that someone wanting to contribute to his own account in the absence of an UK employer will be welcomed with open arms by Newcastle.
They can only say yes or no, and I have a shrewd notion that the response will be in the affirmative.
Customer: replied 1 year ago.
Keith
Thanks. So if I understsnd it correctly the situation with regards ***** ***** employee contributions is
1. They can say I am not allowed to contribute or
2. They say I can or must contribute.
If the answer is 1 then my cost is clearly zero. If it is 2 then what would be the maximum cost to me ie would be the same as a 'Nornal' UK employee ie once I am over the threshold it would be 2% on all other earnings or would it be a lower rate ? (Apologies for coming back but I am trying to understand what my net income position will be compared to if I would be a UK based employee).
Thanks
Expert:  bigduckontax replied 1 year ago.

Your assumptions are all correct.

It would be the normal rare of contribution, but I would be inclined to ask for Newcastle's advice in the matter in your letter. Just to keep stamped it may be considerably less.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3117
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions