The Churchill Knight Umbrella team has recently received several queries from contractors who have moved to the UK but are unsure whether they can use an umbrella company for assignments (both inside and outside the UK). This article will answer some of the questions we have been asked about different types of visas and their restrictions concerning umbrella companies. We hope you find it helpful.
Can my umbrella company sponsor my Skilled Worker visa (previously called a Tier 2 visa)?
Strict rules apply to UK organisations sponsoring migrant workers. An umbrella company cannot sponsor a Skilled Worker visa (previously called a Tier 2 visa) as the visa can only be sponsored by the company for which you will perform the work. As an umbrella company is an intermediary, they supply the worker’s services to an agency or end client. Therefore, they are not permitted to obtain a Skilled Worker visa sponsorship licence for contractors using their service as the individual would be completing the work for someone else.
Intra-company visas (ICT)
There are two types of Intra-company visas. The first is called an Intra-company Transfer visa and applies to those being transferred by an employer abroad to a role in the UK. To be eligible for an Intra-company Transfer visa, you will need to have worked for your employer for over 12 months unless they’ll be offering you a salary greater than £73,900 a year when working in the UK. Please be aware that this visa has replaced the Tier 2 (Intra-company Transfer) Long-term Staff visa.
The other type of Intra-company visa is an Intra-company Graduate Trainee visa. This applies to you if you’re being transferred to the UK by an employer to enrol in a graduate training scheme for a specialist or managerial role. To be eligible for an Intra-company Graduate Trainee visa, you must have worked for your employer for over three months. Please be aware that this visa has replaced the Tier 2 (Intra-company Transfer) Graduate Trainee visa.
I am currently working in the UK on an Intra-Company Transfer (ICT) visa and want to take on some contract work on the side. Can I use an umbrella company for the contract work?
The Intra-Company Transfer visa has replaced the Tier 2 Long-Term Staff visa and allows you to come to or stay in the UK to do an eligible job at your employer’s UK branch.
With an ICT visa, your main job must be working for your sponsor and be the job described on your certificate of sponsorship. However, you can take on a second role for up to 20 hours a week – either in the same profession and at the same level as your main job, or on the skilled worker shortage occupation list. You are also able to undertake voluntary work as well as study with this type of visa. Your umbrella company will be able to process your payment for the second role for up to 20 hours per week.
I live in the UK on a UK Spouse visa. I’m currently in talks with a company to get some freelance IT work in Germany. As I do not have my own limited company set up, how feasible would it be to go through the umbrella company route?
Also known as a UK marriage visa, the spouse visa allows partners of UK citizens to immigrate to the UK to join someone who is ‘settled in the UK’. For example, a British citizen, someone who holds Indefinite Leave to Remain, or someone who has a permanent right of residence. A UK spouse visa means you are eligible to study and work in the UK without restrictions once the visa has been granted. If you decide to take on a contract in the UK, you can use an umbrella company to process your payroll.
Spending time outside of the UK for limited periods, such as holidays and family visits, should not cause any problems with your visa. However, spending extended periods outside the UK may be problematic. The rules around working outside of the UK on a Spouse visa are more complex. It is highly recommended that you seek advice from an immigration advisor before accepting work overseas.
I am in the UK on a student visa. Am I allowed to work, and can I use an umbrella company?
There are strict rules about what work you can and cannot do when granted a student visa in the UK. A student visa restriction may be expressed in terms of the number of hours you are allowed to work, the type of work you can do, such as a course-related work placement, or a work prohibition which means you cannot work at all.
Provided your visa allows you to work, your umbrella company will be able to process your payments. Please be aware they may ask for additional documentation such as proof of term times to ensure they comply with any restrictions.
Can I use an umbrella company to get paid for work completed abroad?
Yes, you can. However, there are restrictions in place which you and the umbrella company must follow to process your payments.
Domestic tax legislation is one of the parameters that will need to be considered when accepting a role. You will need to understand your income tax liability and whether you are considered a tax resident in the country you will be working. The 183-day rule serves as a simple guideline for determining tax residency. It states that if a person spends more than 183 days in a single country, this person will become a tax resident.
Assuming a Double Taxation Treaty does exist between the UK and the country you will be working in, there are three basic criteria to be met to enable your umbrella company to process your pay:
- You must not stay in the country you will be working in for any longer than 183 days.
- You must be employed and paid by an employer (such as an umbrella company) in the UK.
- Your salary must not be paid or recharged to an establishment that your UK employer has in the country you will be working in.
Please be aware that when your umbrella company receives foreign payments, these will automatically be exchanged into GBP (£), which can cause fluctuations in your payments, depending on the exchange rate. The umbrella company must also abide by UK tax legislation. This means that your payments will be subject to Income Tax and National Insurance deductions – similarly to payments made in the UK.
I am a national of an EU country. Can I work remotely from outside the UK without jeopardising my status under the EU Settlement Scheme?
If you have obtained a pre-settled status, you can spend up to two years outside of the UK, the Channel Islands or the Isle of Man without losing your status. However, you will need to maintain your continuous residence to qualify for settled status within your five-year period of permission, as it cannot be extended.
Generally, to sustain continuous residence, you must not have absences from the UK of more than six months in any 12 months. If you hold a settled status, you can spend up to 5 years in a row outside the UK, the Channel Islands or the Isle of Man without losing your status.
I am a non-EU citizen but hold a UK visa. Can I work remotely for my employer?
Before travelling overseas, you must speak with an immigration solicitor to ensure you are fully aware of the implications of travelling abroad for work. Employees who are non-EU/EEA or Swiss citizens should hold a valid UK visa, such as an Intra-company Transfer visa or a Skilled Worker visa. Under the conditions of a Skilled Worker visa, it is possible to travel outside of the UK for business or a secondment. It may be possible for you to return to your overseas home to work remotely for your employer if they have agreed to a home-working arrangement.
If this is the case, you must have entry clearance or leave to remain for more than six months. You must also continue to be employed by your sponsor company and not have a lapse in employment of 1 month or more. Additionally, your sponsor must be satisfied that the work will be done effectively from home, with satisfactory technology and monitoring and data security, without further permissions from the UK Home Office.
However, the rules are slightly different if you have been granted Indefinite Leave to Remain. One of the conditions of an Indefinite Leave to Remain is that you cannot be outside the UK for more than two years. You must also make sure that you extend the visa before the expiry date if you have a time-limited visa to ensure you can return to the UK.
Are you interested in registering with an umbrella company?
If you’re looking for a compliant umbrella company to assist you with your payroll requirements, you’ve come to the right place. Churchill Knight Umbrella is an FCSA accredited umbrella company backed by professionals with over 20 years of industry experience. There are plenty of benefits available to our employees, including free £25 million insurance cover, Same Day Faster Payments, access to our state-of-the-art app, and more!.
If you’re interested in finding out more about Churchill Knight Umbrella and our PAYE payroll service, please schedule a call back for a convenient time, message us here. Alternatively, you can call our professional consultants now on 01707 871622.
You may be interested in finding out your earning potential with Churchill Knight Umbrella. If so, you can request a free and tailored umbrella company calculation. It is also possible to register to Churchill Knight Umbrella now using our online registration form.
Founded by an IT Contractor in 1998, Churchill Knight has become one of the most respected contractor accountants in the UK. We’ve helped over 20,000 contractors with their accountancy requirements. As well as our accountancy services, we also have an industry-leading PAYE umbrella company and dedicated in-house personal tax department. Whichever service you choose, you can move forward with complete peace of mind. We are proud of the reputation we’ve built over the years, and our FCSA accreditation proves how committed we are to compliance within our sector. Keep reading…