Working in the UK as a self-employed professional
- Marco van Hagen
- 24 May 2023
- Edited 13 Dec 2022
- 5 min
- Managing and growing
On 1 January 2021, the United Kingdom left the European Union and became a third country. Now it has left the EU, entrepreneurs working in the UK temporarily will no longer have free market access. This is because the Trade and Cooperation Agreement (TCA) between the EU and the UK does not provide a solution for the provision of services in the UK.
Self-employed professionals working in the UK have to follow local rules, which means they need a special visa for working in the UK temporarily and have to charge VAT on their services.
Travelling to and staying in the UK
There are several things you have to arrange before travelling to the UK. To work in the UK temporarily, you need a Temporary Worker visa. You apply for this visa 3 months before departure.
You must show that you have a minimum of £1,270 in your bank account to support yourself. And you must have a Certificate of Sponsorship, which is a registration that your client must arrange in the UK. This Certificate will remain valid for 3 months. If your client agrees to support you and warrants that you will not be applying for benefits in the UK, you will not have to prove that you have at least £1,270 in your account.
British customs provides information on what personal possessions you may take with you. When travelling to the UK with your own car, you need to have a valid green insurance pass and bring it with you.
The Trade and Cooperation Agreement (TCA) between the EU and the UK contains agreements on services, but it does not specify which professional qualifications foreign workers need. The British government has, however, published a list of services that you can only provide if you are qualified to do so (from page 54). The general requirements you have to meet as a Contractual Service Supplier (CSS) is on pages 59 and 60. Starting on page 61, you can find a list of sector-specific requirements. You can find out which limitations apply to which sectors in the columns. Contractual Service Suppliers are the UK equivalent of Dutch ZZP’ers (self-employed professionals).
At the top of the list, you can see 4 Modes of Supply listed. Each mode covers a different way of providing services:
- Mode 1, you provide the service from the Netherlands.
- Mode 2, your customer comes to you.
- Mode 3, you have your own branch in the UK.
- Mode 4, you go to the UK yourself.
Negotiations on various parts of the TCA are ongoing and mutual recognition of professional qualifications may also become a subject of negotiation. If your professional qualifications are recognised, you will not need a British degree. Let your trade association know that you want your degrees to be recognised in the UK. They can then discuss it with the government. For now, check with the British government whether your professional qualification is recognised. The Dutch embassy in London can also help you answer any questions you have on the matter.
Should you charge VAT?
The default rule for supplying services to UK businesses is that you charge the UK VAT rate, but this depends on the customer’s Place of supply of services. When providing services to private individuals, charge the Dutch VAT rate.
In most cases, you can have your UK customer pay UK VAT on your behalf. To do so, include your customer's UK VAT number on the invoice, along with the phrase ‘reverse charge mechanism’. Your customer will then pay UK VAT in the UK. There are special rules for cases when you cannot use the reverse charge mechanism, such as construction work on property. In this case, you are responsible for charging and paying UK VAT. To do so, you have to apply for a VAT number from the UK government and file a tax return in the UK. For more information on how this works, visit this page made by the UK government.
You can also choose to have a fiscal representative pay VAT in the UK on your behalf. In this case, you will not have to register your company in the UK. It is best to discuss whether this is a suitable option for you and how to do so with your accountant.
Avoid double income tax
If you earn money from employment or make profits as a self-employed professional in the UK, you have to pay tax on that income. However, you also pay income tax in the Netherlands. To avoid situations in which people pay double income tax, the UK and the Netherlands have signed the Double Taxation Agreement. You have to submit forms to the UK government to prevent paying double income tax. Fill out the form yourself or ask your accountant for advice.
National Insurance contributions
The UK has so-called National Insurance. Everyone pays National Insurance premiums, which entitles them to various benefits such as a pension, unemployment benefits, and maternity pay. Self-employed professionals also have to pay NI contributions. With an A1 certificate, you can prove that you already pay the Dutch equivalent of National Insurance contributions in the Netherlands. A1 certificates issued with a term beyond 1 January 2021 will remain valid until the expiration date of the certificate. Sociale Verzekeringsbank (SVB, in Dutch) has a page on new A1 statements and National Insurance contributions.
The British government does not require all self-employed professionals to pay National Insurance contributions in the UK, provided that they mainly work in an EU member state (such as the Netherlands) and are only working in the UK temporarily.
What to arrange with UK customs
Suppose you get a contract for a photoshoot in London and bring your photo equipment along for the shoot. In this case, you should apply for Temporary Admission with UK Customs, as you will also be taking your equipment back to the Netherlands. The ATA Carnet is an easy way to apply for temporary admission. You can request an ATA Carnet from KVK.
If you plan to sell goods in the UK, you have to formally import them and export them from the Netherlands. You will have to pay import duties and VAT on these goods in the UK.
Applying for licences
You do not usually need a licence to supply services in the UK. There are, however, some exceptions, such as if you work in asbestos removal or get a job as an educator. In both of these cases, you will have to request a licence from the UK government.
You must have basic health insurance in the Netherlands. If you fall ill while working in the UK, your Dutch insurer will not automatically cover costs outside the EU. The UK and EU have included agreements in the TCA that entitle you to emergency health care during short stays in the UK. You may use the European Health Insurance Card (EHIC) in the UK until its expiration date, which you can find on the back of the card. To make sure you have all the latest information, visit this page on the website of the Dutch Government (in Dutch). You can also check with your own insurer to see if your health insurance provides coverage outside the EU. It can also be wise to check whether your other insurance policies provide UK coverage.
When you make agreements with a customer, you usually set them out in a legally binding contract, so that you and your business partner both know where you stand. Contracts provide clarity and certainty. Check out our tips on legal matters when doing business internationally.
See if you are still able to honour agreements made in long-term contracts with the UK. Your costs may have increased due to additional red tape or you will have to deal with currency fluctuations. If this applies to you, you can try to renegotiate the contract with your customer.