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Contracting/self employed/umbrella comapnies in New Zealand

Contracting/self employed/umbrella comapnies in New Zealand

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Old Nov 15th 2017, 1:25 am
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Default Contracting/self employed/umbrella comapnies in New Zealand

Hello

Recently got to New Zealand on IEP work exchange visa and have a few questions regarding contracting over here.

My former employer has offered me an initial 6 month contract to cary on working for them remotely in NZ. The company is based in the US but will be paying me in New Zealand dollars through an intermediate company and they have told me I will have to pay my own taxes essentially making me self employed I guess.

In the UK there are a couple of options for me. I could register my own LTD company or go under an umbrella company. I would assume this would be the same in NZ? Does anyone have similar experience working as a contractor over here or worked here under similar circumstances? I'd obviously want the least hassle way to pay my taxes but at the same be most tax efficient as to keep as much of my money as possible

I also understand that if I go under an umbrella company they act as my employer and could potentially offer sponsorship if my contract was extended and I want to stay though I am not clear on this.

If anyone has any info that could help me out it would be much appreciated, I am new here and have roughly 3 weeks before my contract starts. If anyone has used umbrella companies, could you give me advice on which ones are the best?

It is IT based work if that is also relevant?

Any help will be gratefully relieved.
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Old Nov 15th 2017, 4:41 am
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Default Re: Contracting/self employed/umbrella comapnies in New Zealand

So which of these approved schemes are you in or using?

https://www.immigration.govt.nz/new-...d-work-schemes

Not sure I understand (or need to understand), why your previous employer would outsource your work, to you, in NZ???
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Old Nov 15th 2017, 5:37 am
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Default Re: Contracting/self employed/umbrella comapnies in New Zealand

Hi

I'm under IEP.

The company I worked/will work for have a lot of upgrades going on in their network currently. These upgrades take place at night time in Europe to provide minimal outage and downtime to the European customers as that is when they have the least amount if traffic to the network. As my daytime is Europe's nightime it makes sense for them to have someone in the appropriate working hours as to not disrupt the normal daytime hours for European staff. And as I have already a working knowledge of the network and also a rapport with the guys in Europe, its a lot easier for them to out source it to me. Makes sense for everyone involved (and yes you probably didn't need to know that boron stuff )

They are a global company (I was employed under PAYE for the UK branch until recently) and they have contractors already working for them under similar conditions in Australia, Europe and Asia. I'd be the first and only in new Zealand so I don't have a contact in this country to help.me get setup. I'm sure is very similar to UK contracting but a point in the right direction or recommendations would be helpful.
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Old Nov 15th 2017, 6:03 am
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Default Re: Contracting/self employed/umbrella comapnies in New Zealand

Originally Posted by cse View Post
My former employer has offered me an initial 6 month contract to cary on working for them remotely in NZ. The company is based in the US but will be paying me in New Zealand dollars through an intermediate company and they have told me I will have to pay my own taxes essentially making me self employed I guess.
It seems to me that your primary concern would be with regards to your visa, rather than how you will be paid - do you have the right to live and work in NZ to carry on this contract?
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Old Nov 15th 2017, 6:35 am
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Default Re: Contracting/self employed/umbrella comapnies in New Zealand

I am under IEP and have arrived in new Zealand last week. Its a one year visa to live and work in new Zealand.
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Old Nov 15th 2017, 8:22 am
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Default Re: Contracting/self employed/umbrella comapnies in New Zealand

Originally Posted by cse View Post
In the UK there are a couple of options for me. I could register my own LTD company or go under an umbrella company. I would assume this would be the same in NZ?
Those options are available but the reasons for picking the options are different in NZ because the tax structure is different.

In the UK, using a LTD company limits the National Insurance contributions and provides flexibility about when to personally receive payments which can be used to reduce the overall tax due.

In New Zealand it is still possible to be self-employed because the tax treatment of self-employed people is not much different to the tax treatment of employees. There isn't National Insurance in New Zealand but there is an Accident Compensation Scheme that employees and employers contribute to - the contribution amounts to that scheme are low (at the moment, obviously that could change).

New Zealand also has comprehensive anti-avoidance rules which mean that if you try to do something that would circumvent the 'intention' of the tax laws it can be invalidated and you will be served the tax bill that was 'intended'.
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Old Nov 15th 2017, 8:59 am
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Default Re: Contracting/self employed/umbrella comapnies in New Zealand

Yes. My kiwi colleague at work here in NZ previously worked as a contractor to the MOD or NZ air force. It made sense (to him) to remain a contractor by working for himself. Basically he set up his own business with his Mrs as a Director and him as the employee so the MOD or NZ air force paid the company and he took a salary out of the company but at a lower rate of tax (max 25% instead of 33%) I think. I think he was also GST registered as the company earned enough meaning he could purchase tools and equipment a company vehicle etc and claim back all the GST.
He isn't a contractor any more as he's an employee like me but I'm sure he still has the business running ???

I could ask ?
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Old Dec 3rd 2017, 11:50 pm
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Default Re: Contracting/self employed/umbrella comapnies in New Zealand

You need to consider the specific rules the NZ IRD apply to test the treatment as employee versus contractor.
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