Freelancers' Questions: Can I freelance from India for UK companies?
Freelancer’s Question: Can I work as a freelancer if I stay in India but still work on a self-employed basis for UK companies in the UK?
What would happen to my tax obligations? And what happens if I ever have to go to the UK and visit the UK companies in-person, for a meeting about my work? Among the companies is the first firm I’ve come across not keen on doing absolutely everything via Zoom!
Expert’s Answer: Thank you for your interesting question.
I will assume that you are an Indian resident for tax purposes in India.
Stay as a sole trader
If so, you can certainly work for a client in the UK. You will need to invoice them of course, which you can do either personally or as a company, in the instance that you have an Indian company.
But you should note that we cannot foresee any advantage for a sole trader to operate (in the way you indicate) as a limited company. If you did opt to become a company, we calculate that you would face more set-up costs, more expense and more bureaucracy! So if you’re not operating as a company in India already, definitely don't become one.
Your first ‘must-do’ – GST register
Next, consider that since the abolition of Service Tax and its replacement by GST, you must have GST registration to bill your client from India to the UK. Registration applies whether you are self-employed or have an incorporated business. The GST liability will be nil, but it is mandatory to have the registration.
For the avoidance of doubt, GST stands for ‘General Sales Tax’ and is equivalent to Value Added Tax (VAT) in the UK and elsewhere. The history of GST is 17 years long but it only passed into law on July 1st 2017. The law was introduced to replace service tax, duty and other indirect taxes, and to try to facilitate inter-state trade in a federal India. In most of these regards, it has been a success.
Your work won’t be taxing here, but here’s your second ‘must-do’
But back to your individual situation. You will have no UK tax liability, but you must declare your income as a self-employed person or your profits, if you have a limited company, to the Indian Revenue Service (IRS).
Regarding the second aspect of your question, be aware that you will not be allowed to work in the UK without a work visa. You may come to the UK on a tourist visa or business visa that you can apply for at the High Commission’s Consular Offices (The main office is in Chanakyapuri, New Delhi, but there are offices throughout India).
Visa considerations (continued)
However as you will see from the small print, neither of these Standard Visitor visas permits you to take gainful employment, so you could not work despite having this visa. You may attend meetings and conferences, and if you are coming only to discuss the scope of your work (as you suggest), then you should probably be sufficiently covered by a business visa. But don’t abuse it, or you may find it hard to obtain permits in the future!
Finally, it may help you to know the documents that you will need in order to apply for a business visa for the UK.
Key documents you need to apply to enter the UK ‘on business’
- Your passport (A passport is a document that is required at the time of international travel).
- Your old Passport
- Your photo
- A valid air ticket
- A covering letter from the company (which you will be doing the work for)
- A recent bank statement
- Your income tax returns
- A so-called ‘invitation letter’ from the company
With all of these eight documentary requirements, you can find more details here, but receiving tailored advice, in-person, would be our ultimate recommendation to ensure your work and trip to the UK is compliant and free from any nasty surprises. Good luck!
The expert was chartered accountant Kevin Austin, manging director of overseas working advisory Access Financial.