Agencies

Help seal the business by providing the contractor with advice on the tax structure and figures in the preparation stages of the contract.

Quite often charge fees which are less than that of a local accountant, given that our local accounting partner will have provided a preferential fee based on volume.

Protect the staffing agencies, and the client’s, business. Dynamic will liaise with the contractor to obtain proof of the contractor’s registrations in their Country of Assignment, and then provide this to the agency’s compliance department. Dynamic operates solutions which are fully compliant with the legislation of the Country of Assignment, providing the agency and contractor with peace of mind as the contract progresses.

Manage the contractor on the agency’s behalf and provide one point of contact for timesheets and invoices each and every month, saving the agency the trouble of managing and chasing a large number of contractors.

Take on the compliance risk from the agency.

Deal with any monthly queries from the contractor (thereby shielding the agency).

Save the contractor the headache of locating their own accountant. Dynamic’s solutions include the advice and guidance of a local accounting partner in the Country of Assignment, leaving the contractor free to focus on their role and move to a new country. This accounting partner will be specialised in dealing with the particular requirements of foreign nationals.

What are the drawbacks associated with contractors using their own limited companies abroad?

The 183 day rule does not apply to your contractors:

The 183 day rule applies to workers who, having been employed by a company in a country (for example, the UK), are then sent to Germany (for example) to work for that company. That is, they are seconded to Germany by the company. Those workers can remain on a UK payroll/linked to the UK for a period of up to 183 days. After this point they must be registered in the German system.

Given that contractors are individuals going to work in Germany, (not linked to, seconded by, or employed by, any company), their cases are different to that above in so far as they are tax-liable in Germany, on their German-sourced income, from the very first day they work there. Recent legislation enacted in both Belgium & Germany enforces this premise.

Some contractors argue that their own limited company has in fact seconded them to Germany (and they can therefore avail of the 183 day rule as above). However, in the case of individual contractors, their centre of economic interest has moved to Germany (as they are the centre and driving force of their company) and they are therefore liable for German taxes from day one. They are also physically present in Germany and sourcing their income, directly or indirectly, from a German client.

Social Security:

Contractors using their own UK Ltd company for an extended period overseas will most likely not be adequately covered for Social Security.

Backdating of tax liability:

When an individual contractor uses his/her own UK Ltd company for several months overseas, and then registers in the Country of Assignment for taxes, the calculation and payment of these backdated taxes in the Country of Assignment can be a very complicated matter. This is because the funds will already appear in the UK entity for assessment by HMRC.

Commercial & Other aspects:

A scenario whereby a contractor has been using his/her own company for an extended period will almost inevitably lead to a situation where the recruitment consultant has to “re-sell” the project to the contractor six months down the line. At this point, the contractor is quite often reluctant to change his/her structure and register in the system. As above, even if they decide that they do indeed wish to do this – the mechanics of the associated registrations and tax payments are not always straightforward.

The staffing agency and the contractor will, in many ways, have opposing agendas and goals when discussing any potential project. Satisfying the request of a contractor to use his/her own company, in the short term, will often lead to issues as the contract progresses. These issues will ultimately detract from the overall efficiency of the staffing agency’s business model and add to the costs associated with each individual contractor.

Most European solutions operated by management companies are straightforward for the contractor to operate from an administrative standpoint and also financially attractive. There is therefore no great deterrent to their registering in-country from the beginning of the contract. Presenting this to the contractor in the initial dialogue, when the role is discussed, ensures that everything is clear and concise and minimises issues as the contract progresses.

Our Ethos:

At Dynamic, we endeavour to provide a level of service to agency clients which surpasses all others in the industry. Our experience in the contract market underpins the belief that our ultimate goal should be to unburden the agency from the many and varied tasks associated with the management of contractors in their working country. This philosophy is embedded in our procedures from the very first call through to the point at which the contract comes to an end.

Information and guidance:

During initial discussions, our Sales team strive to provide your contractor with a high level of information so that they may make as informed a choice as possible. Constant communication at this point with the recruitment consultant is also conducive to prompt, effective processing of the deal.

UK and Ireland based service centres:

Upon registering as a Dynamic associate, our Ireland based Client Service Centre will ensure that your contractor’s each and every requirement is taken care off throughout the duration of their contract. From the administrative steps necessary in registering in a new country, right through to payments procedures, the contractor will be guided through the process – permitting you to return your attentions to your core recruiting activities.