Can I Freelance Abroad?

The world is a proverbial oyster for freelancers. Your work is almost exclusively done online, so you could quite literally be anywhere, and it wouldn’t make a difference. Why stay put, then?

One of the biggest attractions for many freelancers is the ability to set your own schedule and ultimately, live life on your terms.

There are several important factors to consider about freelancing overseas before you rush off to book that flight, though. In this article we’ll go over some of the concerns you’re most likely to have, including paying tax on foreign income if you do go ahead and freelance abroad.

Paying tax on income if you freelance abroad

If you’re considered a UK tax resident, you most likely need to pay UK tax on all your income. This rule applies even if some of your freelance income comes from a client based in a different country.

So what happens if you’re also overseas? This is where things like tax residency rules and double taxation agreements come in.

Understanding how tax works is by far the scariest part of freelancing abroad. It’s a very good idea to ask for help from an accountant, and to keep meticulous financial records. In the meantime, we explain some of the basics below.

Tax residence status

Working out your tax residence status can be tricky, but it affects whether you need to pay UK tax on income you earn from freelancing overseas. A general rule of thumb is that if you spend 183 or more days in the UK in a given tax year, you’re probably a resident (and need to pay UK tax!).

If you’re not a UK tax resident, then you’ll probably only need to pay UK tax on the portion you earn in the UK. You’ll still need to pay tax on your foreign income to the local tax authorities though. So make sure you understand the rules for that country!

The reality is likely to be far more nuanced and confusing though, so we’ll say it again – talk to an accountant if you’re not sure.

Double taxation rules

You might be able to offset income tax you pay in another country against your UK tax return, so you won’t pay tax on the same money twice. This is possible if the other country has a double-taxation agreement with the UK.

It also means it’s very important to make sure your freelancing records are detailed enough to make sure you pay the right tax to the right tax authority!

Getting paid for overseas freelance work

Some overseas clients will want to pay you in their local currency, or the bank might charge handling fees for international transfers.

These are just two examples, but there are lots of ways the amount you receive is different to the amount you invoiced. To minimise the impact, consider:

Telling existing clients your plans

Moving abroad or operating in a different country shouldn’t affect things too much if you don’t usually need face-to-face contact with your existing clients. Still, everyone’s different. Some people prefer meeting in person for a sense of security and familiarity.

With that in mind, it’s a good idea to let everyone know you’re planning to travel before you actually leave. Communication and honesty go a long way towards building lasting relationships with clients! The same point applies if you’re not moving, but taking on clients in other countries.

Dealing with the time difference when you freelance for clients in other countries

This is a vital consideration for freelancers with clients across different time zones. It can affect everything, from zoom calls to work deadlines. On the topic of deadlines, you’ll need to remember to convert them into whatever time zone you’re in.

There’s also a danger your workload could become unmanageable, with different tasks being due at different times throughout the day. It can get even more confusing when you’re dealing with multiple time zones! Organisational skills are key.

Access to the internet

Funnily enough, in order to use the internet while travelling, you’ll need to be able to access it. Who’d have thought?

In all seriousness, this is something you’ll want to plan ahead for. Especially if you’ve got looming deadlines or client calls pencilled in. A simple way to guarantee access is to book accommodation with Wi-Fi (whether it’s free or paid).

Of course, you could also invest in some kind of mobile Wi-Fi device as a backup, and there’s always your phone signal. Just keep an eye on those data roaming costs. They can play havoc with your profit margins, but make sure you claim them as a business expense where appropriate. Which is where online accounting software can be very useful!

Learn more about using Pandle to make business accounting easier. Create an account today and decide what to do with all the extra time you get back.