As a UK IT freelancer, what are my options if I want to work overseas?

As a UK IT freelancer, you have several options if you want to work overseas, writes chartered accountant Kevin Austin, managing director of overseas contracting advisory Access Financial.

One choice is to continue to work for your UK clients while you are abroad, and this is a good option if you have a sound relationship with your clients and they are willing to work with you remotely.

Want to freelance overseas? Here’s what to consider

However, you will need to consider the immigration and tax implications of working abroad, as you may need a work permit and be liable to pay taxes in the UK – as well as the country where you will carry out the work.

Work permits are particularly worth allocating time and patience for.

Work permit to freelance in France: a cautionary example

For example, the application process for a self-employed work permit in France is much more complex than elsewhere – such as in Germany, because as a Briton, you must submit a detailed application dossier to the French Immigration Office.

Generally speaking, the difficulty of obtaining a self-employed work permit varies depending on several factors, including your nationality, qualifications, and the type of business you plan to start. Further with France, the difficulty results from the fact that the French government has strict requirements to be a ‘self-employed’ worker.

Finding work abroad isn’t always easy

Another option is to find new clients in the country where you intend to work, which can be an excellent way to experience a new culture and meet new people.

However, it can be challenging to find clients if you are unknown in the country. You may need to obtain a work permit or visa, depending on the country where you are working.

What about Brexit if working overseas?

Since Brexit on January 31st, 2021, UK nationals do not have the right to ‘free movement’ they enjoyed before.

To work in the EU and the European Economic Area (EEA), you will need a work visa to work throughout their territories or countries. As the UK is now categorised as a ‘third country’ (ever since it left the European Union), UK nationals have no more or fewer rights to work in the EEA’s 30 countries than any other ‘third-country’ nationals. The result of Brexit has been that UK nationals are free to work without a work visa only in the ‘Common Travel Area,’ which includes the Republic of Ireland, the Isle of Man, and the Channel Islands.

Steps you can take in the UK if you want to work abroad as a freelancer

If you would like to work as a self-employed contractor outside the UK, my recommendation is that you contact the Embassy or High Commission where you live and apply through them.

Keep in mind, many so-called ‘digital nomad visas’ are now available from countries which want to attract independent workers, and the authorities grant these nomad visas for between one and two years, provided that you (the freelancer) meet certain income and other criteria.

Nomad visas vary, in that some of them prohibit working for local businesses; others permit it, and others still restrict the work you do for local businesses to a small proportion of your total remuneration!

Digital nomad visa examples

So it’s important to check the small print of whichever nomad visa you’re going forward for. And be prepared for some stiff or strange requirements -- or plain restrictions, to obtaining a digital nomad visa:

Georgia: Applicants must have a monthly income of at least USD 2,000. Additionally, applicants must purchase health insurance from a Georgian insurance company.
Barbados: Applicants must have a monthly income of at least USD 50,000. Additionally, applicants must pay a USD 2,000 application fee.
Dubai: Applicants must have a monthly income of at least USD 5,000. Additionally, applicants must have a valid health insurance policy.
Estonia: Applicants must have a monthly income of at least USD 1,500. Additionally, applicants must have a valid health insurance policy.

What is the tax position for a UK freelancer who wants to work overseas?

But what about tax? As a UK tax resident, you are subject to UK taxation under HMRC on your worldwide income, and this means that if you work abroad, you may well face being taxed in the country of work and back home.

To avoid liability to UK tax, you must leave the UK for a complete tax year (April 6th until the next April 5th) for work. If you meet these criteria, your income tax will be due only in the work country.

While that might sound straightforward, the tax implications of working abroad, informing HMRC of your intentions, and then registering yourself in the work country are complex.

Let’s look at registration a bit more.

Registering in an EU country to work as a UK IT freelancer

You will almost certainly need to register in the EU if you go there to work, because each EU/EEA country has its own rules and regulations regarding the registration of foreign workers.

In general, you will need to register with the local authorities in the EU country where you work -- if you stay for more than three months. However, there are some exceptions to this rule. For example, if you are a citizen of another EU country, you may be able to work in another EU country without registering.

Either way, it is essential to check with the authorities in the EU country where you plan to work to determine the registration requirements. You can find more information on the website of the European Commission.

In-country compliance looks like this…

Here are some additional things to keep in mind, relating to your ‘in-country’ requirements:

The registration process for foreign workers can vary depending on the EU country.
You may need to provide additional documentation when registering with the local authorities, such as a valid passport, proof of employment, and proof of health insurance.
If you plan to stay in the EU country for over three months, you may need to apply for a residence permit.
If you are working through your UK limited company, and you fail to register it in the work-country and the foreign authorities become aware of it, they will take a dim view and interpret your oversight as intent to evade taxes in the work country.

The best and safest way forward? You should strongly consider obtaining expert advice in the UK as well as where you plan to work to avoid problems (or even just nasty surprises!) with the various tax authorities.

What about social security if freelancing abroad?

Social security -- in the UK that’s broadly National Insurance Contributions, is another complicated area.

The general rule is that self-employed people pay social security where they work; in the work-country. If you want to avoid this and qualify for an exemption, you must obtain an ‘A1 form’ from HMRC or ‘Certificate of Coverage,’ in the event that there is a social security treaty between the UK and the work-country.

Here are some general tips for working overseas as a UK IT freelancer:

Do your research. Before you move to another country to work, it is essential to do your research and learn about the local job market, tax laws, and immigration requirements.
Build a strong portfolio. Your portfolio is your most important asset as a freelancer. Ensure it is well-organised and showcases your skills and experience in the best possible light.
Network with other freelancers. Networking with other freelancers is a great way to find new clients and learn about exciting opportunities. There are many ways to build contacts online and don’t rule out offline networking groups, especially those for freelancers and technologists if you’re set to freelance in IT.
Use online job boards. Several online job boards are dedicated to freelance IT jobs. These job boards can be a great way to find clients in other countries, and give you a sense of whether you’re skills are in demand; in which countries and for how much.
Market yourself to international clients. You can market yourself directly to overseas end-users through your website, social media, and email marketing campaigns. You can also attend international trade shows and conferences.

Here are some more every day, practical tips for working overseas as a freelancer:

Make sure you have a reliable internet connection. As a freelancer, you must have a reliable internet connection to work with your client; and get something speedy, too, if you’re going to use video phone software.
Be prepared to work long hours. Freelancing can be demanding, and you may need to work long hours to meet deadlines. Time difference between the UK and your work-country should be factored in too.
Be organised and efficient. Freelancers must organise themselves and effectively manage their time and workload; you are your own organiser and nobody else will make the important calls for you!
Be professional and reliable. Being professional and reliable when working as a freelancer means meeting deadlines, communicating effectively with clients, and delivering high-quality work. There will be cultural differences if you freelance abroad (and you’ll need to be sympathetic if not attuned to these) but a strong work ethic is almost universally appreciated.

Working overseas as a UK IT freelancer can be a rewarding experience. By following the tips above, you can increase your chances of success!