We’ve got an employee who will be following his wife’s career to Germany, we’d like to keep him as he’s good at his job and everything we do involves a laptop and a phone, so it can be done from anywhere. Anyone know what the laws are around how we’d pay him? Apparently if he’s not domiciled there it’s fine and we can just keep paying him as normal, but if he is domiciled there we’d have to pay him his net salary as a freelancer while we pay tax on it here, but then he might have to pay tax on it there too. How long can you live somewhere without being domiciled there?

I’ve no idea about any of this tbh, and it’ll be a case of him having to go off and consult someone who has a clue about this for a living, but there seem to be a lot of expats on STW so figured it was worth a punt!

It has a lot to do with intent, it is a permanent move so he should really be in the German tax & health insurance system from the start. He and you could probably have 3-6 months grace to see if the arrangement worked or not.

Our company find that anything over 3 months temp assignment, proving compliance with the rules is not worth the effort and “localise” employees at that point.

This is a big part of what took down trail addiction, so I would suggest getting proper advice (and instruct that advice that you don’t want to push against the boundaries).

To be honest it is probably better for him to be in the German health/welfare insurance system ASAP anyway.

There’s a form to fill out so that you can pay him without deducting UK income tax. Thereafter, you just pay him what he earns and it is his responsibility to fill out a self-assessment each year to ensure he pays the HMRC the correct amount of income tax.

Edit: is he an employee? You say he’s freelance – in which case just keep paying him as normal. It’s his responsibility to pay the correct amount of corporation and income tax.

Thanks MSP, an interim trial period is probably a good idea. I think it’s most likely he’d look to be domiciled there, as you say it’ll be better to get into the healthcare system there ASAP.

He’s currently an employee fanatic – I guess another option might be for him to become a freelancer, albeit on a ‘permanent’ assignment.

He’s currently an employee fanatic – I guess another option might be for him to become a freelancer, albeit on a ‘permanent’ assignment.

The Germans have *very* strict rules on this – I would counsel him to seek professional advice before he agrees to anything.

There used to be a long thread on http://www.contractoruk.com on this sort of thing, so worth a search there.

How long is he moving to Germany for? If it’s intended to be permanent, you can’t keep him in UK NI.
This is stuff I do for my day job, so PM me if you want some basic pointers…

He’s currently an employee fanatic – I guess another option might be for him to become a freelancer, albeit on a ‘permanent’ assignment.

In which case my initial advice stands. Get him to fill out a P85 and then he’ll get a new PAYE tax code (an NT code). You then pay him according to the new tax code, i.e. “No Tax”.

As for advice for him, I did this for 18 months when living in USA and working for UK company. To be frank it was a self assessment nightmare. I made a balls up of it in the UK and ended up being fined for incorrect tax declaration. In hindsight I should have consulted an accountant.

His wife has a 2 year contract Stealth so probably that long – thanks for the offer. Who is best to speak to about this sort of stuff IRL – would it be an accountant? The company is essentially saying he needs to figure it out himself, but it would be nice if we could at least advise him who to speak to!

The company will probably need to get involved as he will be taxable in Germany.
The NI can be set up so he stays in the UK system, but it needs to be done by the employer.
If he gets an NT code as above, you won’t tax him in the UK, but I’m not sure if he could self-assess in Germany.
We use a selection of the big international accountancy firms for advice, but it isn’t cheap. I’d advise you to get advice as the employer anyway, to make sure you aren’t liable…

I was/ am in a similar situation:we left UK for France. My UK employer was in agreement to keep me on. I might have stayed salaried ‘for a bit’, but then as we had children and my wife registered in France we decided it was time to be completely in France and all above board. I ended up going freelance, best move I ever did. Re-ignited my career and now I work for lots of other clients and occasionally do stuff for my old employer. Feel free to search my forum history as I have written lots on this before.