Foreign worker with UK Works Visa

[~J~]

Hoping someone with a bit of knowledge can perhaps point me in the right direction.

Will keep it as brief as I can, but will need to highlight a few points.


Got a friend, from Turkey, who is on a 5 year UK works visa. They have just entered their 3rd year.

They moved to the UK to a full-time position, and in July, left to undertake contract work (they are currently in a contract position for 3 months so will need to start looking again soon)

Last night they had an interview for contract work however the meeting went slightly different than expected.

The company does not wish to offer the position to a "contractor", they would prefer someone as a full-time member of staff.

My friend does NOT want the full-time commitment but would rather still have the option to do contract work.

The company therefore suggested the following:

The my friend sets up a business in Turkey (they can't set up a British one because they are on a UK Works Visa)

My friend then says "I am this company, based in Turkey, and we have a member of staff in the UK that can do the work" The company in London pays the company in Turkey a fixed monthly fee of money and the company in Turkey (my friends company) then pays my friend in the UK their wages AND of course any NI/Tax contributions.

Does anyone know if this is legal / totally permitted?


*edit*

Forgot to add:

The company in London is offering a fixed monthly retainer of £500pcm. If my friend needs to work, then they'll pay the additional daily rate. In theory it will mean that the company in London will have rights to be friends abilities on an ad-hoc basis (the £500pcm retainer), but they are also free to pursue contract work. "However", because of the £500pcm, the company in London would take precedence over any additional contract work my friend undertakes.

 

[Vonhelmet]

Call a tax specialist. It sounds do-able, but you might find that the setup has to be done in a particular way to work.

It'll also depend on whether the overheads and faff of running a company are worth it.

 

[Greebo]

Ignoring the legalities I fail to see how this helps the company out? Your friend could just stop working for them at any time surely? So why don't they just give him a contractor's job?

 

[Castiel]

Sounds a bit strange to me. Dunno if it is illegal per se, it does seem to be a way of the company getting out of paying employers tax and NI though.

 

[~J~]

Thanks Von, to be honest I wasn't expecting a "yes it can be" or "no, that's illegal" answer, but rather a pointer to which government organisation would be best to contact.

You've mentioned the tax specialist, so my thanks. That's a starter

 

[~J~]

Ignoring the legalities I fail to see how this helps the company out? Your friend could just stop working for them at any time surely? So why don't they just give him a contractor's job?

They don't want to give them a contractors job because they believe (as some companies do) that a contractor wouldn't give full commitment and/or a contractor is free to go (within reason). The 'contract' as such would be for a year, so my friend is guaranteed the minimum of £500pcm for a year, even if they are not required and even if they are not able to find additional contract work with another company. If they DO find additional contract work with another company however, they have a contractual obligation to give precedence to the company in London.

Sounds a bit strange to me. Dunno if it is illegal per se, it does seem to be a way of the company getting out of paying employers tax and NI though.

Maybe, BUT, my friend is not wishing to jeopodise their works Visa and so IS fully prepared to pay NI/Tax contributions in whatever legal manner they can.

 

[drizzy]

What is a 'works visa'? There's no such thing? And I'm not aware of any visas which have a 5 year period in the UK (most need to be renewed after 2/3 years)?

Assuming it's tier 1, there's no restrictions on starting your own company either.

 

[Greebo]

What is a 'works visa'? There's no such thing? And I'm not aware of any visas which have a 5 year period in the UK (most need to be renewed after 2/3 years)?

Assuming it's tier 1, there's no restrictions on starting your own company either.

This. It's only ever a two year work visa which then needs renewing. Are you sure your friend isn't over on a 5 year visitors visa and hence is working illegally anyway?

 

[Greebo]

They don't want to give them a contractors job because they believe (as some companies do) that a contractor wouldn't give full commitment and/or a contractor is free to go (within reason). The 'contract' as such would be for a year, so my friend is guaranteed the minimum of £500pcm for a year, even if they are not required and even if they are not able to find additional contract work with another company. If they DO find additional contract work with another company however, they have a contractual obligation to give precedence to the company in London.



Maybe, BUT, my friend is not wishing to jeopodise their works Visa and so IS fully prepared to pay NI/Tax contributions in whatever legal manner they can.

I get that but how is the "contract" any different to a Turkish company than it would be to him as an individual? They say they don't want a contract yet they are basically giving him one through a Turkish company.

Also your friend can account for his NI and tax in the UK but what about the Employer's NI? The company in paying a Turkish company would be avoiding this. Or are you suggesting your friend will volunteer to pay the 12.8% employer's NI as well?

 

[~J~]

I believe they have a Tier 1 Visa, which, as was mentioned (and which I didn't know) shouldn't hold any restrictions in them setting up a business here in the UK.

I can't offer any other information which I don't know. We were talking about it last night and thought I'd ask here seeing as there are various people with various skills and knowledge in various areas and expertise.

 

[Greebo]

Tier 1 visa is definitely two years.