Guide For Recruitment Agencies Placing Contractors Overseas

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Recruitment agencies are vital for contractors wanting to work flexibly on their terms, around the globe, as they specialise in finding the perfect client match – but how easy is it for agencies to handle all the administration associated with contracted work?

If you’re placing contractors overseas for a contract or they’re working from the UK with a client from outside of the UK, you will be aware of the complexities involved in ensuring your contractor is compliant and pays the correct tax and insurance for the work they do. Setting up contractors in their new role and a new country is less straightforward than it used to be thanks to the IR35 reform as this adds an extra layer of complexity to the process.

Taking Care Of Your Contractors 

The ins and outs of admin related to employment status overseas can be tough for contractors and clients to navigate. They need to make sure tax status, national insurance and statutory rights are all correctly established and maintained on an ongoing basis. Otherwise, mistakes are made with compliance and tax matters which can be costly.

Considerations When Placing Contractors Overseas

Contractors need to know the employment status of their contractors and whether they fall outside of IR35 or within. You can use HMRC’s CEST tool to work out where your contractor stands with regard to IR35, or you can seek expert help on this to remove the inconvenience and uncertainty of it all.

If your contractor is outside of IR35, they are working as a contractor via a PSC which means they are responsible for making sure they pay the correct insurance and tax. If they are inside of IR35 and in the UK but with overseas clients, then they are classified as an employee for tax purposes and responsible for statutory rights. Tax and compliance issues are time-consuming and come with risks if not handled right, which is why many recruitment agencies refer contractors to an umbrella company. Using a third-party payroll employer enables your contractors to access their statutory rights and manage their tax and insurance payments too.

If your contractor is working on your client’s site outside of the UK, then local considerations add extra complications to the administration. The local tax laws, insurance and registration procedures need to be taken care of, and if your client is unable to payroll them then you may want to suggest  a local third-party company to assist to ensure your contractor pays the right tax and insurance, is compliant, and able to access all the benefits available for foreign workers including holiday and sick pay.

Why Your Contractors Should Use An Umbrella Company 

Using an umbrella company like Cool Company lets you focus on what you do best – looking after your end clients and making the perfect match between them and contractors wanting to work overseas and gives your contractors peace of mind. 

We can take care of every administrative aspect of placing contractors with clients outside of the UK. From establishing their employment status and if they fall outside of IR35, through to the tax rules, insurances and statutory rights.

Cool Company provide you with an easy-to-use digital solution for fast onboarding of contractors as well as effortless assignment tracking and the ability to receive just one invoice with all your contractors’ invoices included so you can pay with a single payment.

So, if you’re placing contractors overseas, you can relax – we will provide you with the most comprehensive yet straightforward and hassle-free way of taking care of all the administration involved with contracted work.

Do you want to know more?

Read more about us, our service and the industry, or reach out directly to us.