UK Resident exploring freelance work for a Swiss Company

Question

I'm not currently registered as self-employed but have been offered a work opportunity by a Swiss Company, working from my home in the UK, on an hourly rate.

1. How can I work and pay my NI / Tax without necessarily registering as self-employed ?
2. Is this allowed ?

I'm not really doing business with anybody else, it's more like a part-time contract from my point of view.

Or can the company hire me on a fixed-contract without processing tax/NI in Switzerland and making me responsible for paying my tax in the UK by putting it through as foreign income (as employment, rather than self-employment).

I'm unemployed and am looking for the easiest way of making this work, so they can pay me and I can honour my tax/NI in the UK. Any help you can give would be great !

Answer 1

If the firm treats you as an employee then they are treated as having a place of business in the UK and therefore are obliged to operate PAYE on your behalf - this rule has applied to EU States since 2010 and the non-EU EEA members, including Switzerland, since 2012.

If you are not an employee then your main options are:

• register as self-employed
• set up your own limited company and work through that
• register with an "umbrella company"

An umbrella company would basically bill the client on your behalf and pay you net of taxes and NI. You potentially take home a bit less than you would being 100% independent but it's a lot less hassle and potentially makes sense for a small contract.

Answer 2

You will need to register as self-employed aka sole trader (that's the whole point: pay taxes on income that you're not getting as wages from an employer, who would arrange PAYE/NI contributions), or set up a limited company (in the last case you would have the option of either getting paid as wages or as dividends — which one is better is a complex issue which varies from year to year).

You'll find lots of advice on the HMRC website.