Working out of India for UK company from 1 Jan 2016 on contract
Work under UK umbrella company.  By this you are thinking of creating a new legal entity in UK, then its not a very great idea. There will be lot of paperwork, additional taxes in UK and not much benefit.  Ask UK company to remit money to Indian savings bank account   Ask UK company to remit money to Indian business bank account Both are same from tax point of view. Opening a business bank account needs some more paper work and can be avoided.  Note as an independent contractor you are still liable to pay taxes in India. Please pay periodically and in advance and do not wait till year end. You can claim some benefits as work related expenses [for example a laptop / mobile purchase, certain other expenses] and reduce from the total income the UK company is paying
"As you are earning an income by working in India, you are required to pay tax in India. If you contract is of freelance, then the income earned by you has to be self declared and taxes paid accordingly. There are some expenses one can claim, a CA should be able to guide you.   Not sure why the Swiss comapny is paying taxes?. Are they depositing this with Income Tax, India, do they have a TAN Number. If yes, then you don't need to pay tax. But you need to get a statement from your company showing the tax paid on behalf of you. You can also verify the tax paid on your behalf via ""http://incometaxindia.gov.in/26ASTaxCreditStatement.asp"" you cna register. Alternatively if you have a Bank Account in India with a PAN card on their records, most Banks provide a link to directly see" Salaries in India are generally paid of the month. If you have joined mid-month like you mention on 6th Jan. The first salary will be for part month. In your case it would be (15000/31) Multiply by 27 Days. Rs 13065. You should get a salary slip that would give more details. I have some more inputs to investigate: India has dual tax avoidance treaty signed with european countries so that NRIs dont pay tax in both countries. Please check if India has some agreement with Swiss Also for freelance job that is delivered from India, u need to make sure where you have to pay taxes as you are still in India so the term NRI will not hold good here. Also, if Swiss company is paying tax there, and you are  a freelancer from India(resident in india) how to tax filing /rate etc has to be investigated. Also, can you apply for tax back from swiss( a portion of tax paid can be refunded eg: in Germany) but I dont know if this is true for Freelancers and also for people out side SWISS. Bip Thanks for the reply! I am considering all lines of work as the priority is the location, then the job. But if the work I can get is relevant and expands my network, that carries a lot of value.  The plan is to stay where I am for the next 2-3 years to gain the required work experience to become a charterholder and developing my skills/project portfolio to become a better candidate. I would still be young enough to move to Australia/UK on a working vacation/youth mobility and I want to be set up to have a good chance by then. "Do I need to pay taxes in India in this scenario? For India tax purposes, you would still qualify as ""Resident Indian"". As a resident Indian you have to pay taxes on Global income. It is not relevant whether you transfer the money back to India to keep in US. The income is generated and taxable.  Depending on your contract, presumably you are working as a free lance; certain expenses are allowed to be deducted from your income, for example if you purchase equipment to help carry out the work, stay / entertainment costs, etc. Consult a professional CA who should be able to guide you on what is eligible and what is not. The balance along with your other income will be taxed as per tax brackets. There is exemption for certain category of workers, mostly in entertainment industry where such income is not taxable. This does not apply to your case." "As you clarified in the comments, it is not a contract work but rather an additional temporary assignment with the same employer. You were paid for it in form of a ""bonus"" - one time irregular payment, instead of regular periodic payments. Irregular wage payments fall under the flat rate withholding rule (the 25% for Federal, some States have similar rules for State withholding). This is not taxes, this is withholding. Withholding is money the employer takes from your salary and forwards to the IRS on the account of your tax liability, but it is not in itself your tax liability. When you do your annual tax return, you'll calculate the actual tax you were supposed to pay, and the difference between what was withheld and your actual tax will be refunded to you (or owed by you, if not enough was withheld). You can control the regular pay withholding using W4 form." With a question like this you should talk to a tax professional who knows about international tax and knows about both the UK and the country you will be working in. They will give you up to date advice on what can be an extremely complex question. However to get you started I'll tell you what I was told when I did this nearly twenty years ago. It's all about whether you are resident in the UK for tax purposes or not. If you are, you will pay UK tax. If not, you wont (assuming you are being paid outside the UK - check with your professional exactly what is involved). In those days you could be counted as 'non resident' if you spent a complete period of twelve months outside the UK. You can make occasional visits to the UK without invalidating that. Again, check exactly how much you are allowed to return while still being not resident. Usually you will have to pay tax in the country where you are resident, but check the rules there. With some skilful timing you may be able to be considered non-resident in bouth countries, at least for some of the time. Again, your tax professional will know. The bank account question - again get a professional. I don't think it's a problem, but you may have to establish that you are being paid in the foreign country. In general you are going to need an account in the country where you work, so if its a problem get paid there and transfer any money you need in the UK. I know people who work in the gulf and most contracts are of the 14 days on/ 14 days (or so) off flavor. I've never heard of someone being onboard a ship or platform for a year. I bet this is a scam. "The P11D is a record of the total benefits you've received in a tax year that haven't been taxed in another way, a bit like the P60 is a record of the total pay and tax you've paid in a tax year. Note that travel for business purposes shouldn't be taxable, and if that's what's being reported on the P11D you may need to make a claim for tax relief to HMRC to avoid having to pay the tax. I'm not sure whether it's normal for such expenses to be reported there. HMRC will normally collect that tax by adjusting your tax code after the P11D is issued, so that more tax is taken off your future income. So you don't need to do anything, as it'll be handled automatically. As to how you know it's accurate, if you have any doubts you'd need to contact your former employer and ask them to confirm the details. In general you ought to know what benefits you actually received so should at least be able to figure out if the number is plausible. If your ""travel"" was a flight to the USA, then probably it was. If it was a bus ticket, less so :-) If you fill in a tax return, you'll also have to report the amount there which will increase the tax you owe/reduce your refund. You won't be charged twice even if your tax code also changes, as the tax return accounts for the total amount of tax you've already paid. For travel benefits, the exact treatment in relation to tax/P11Ds is summarised here." Permanent employees are the distinct opposite of contractors. Upwork can easily have business entities (limited liability company equivalents) in multiple countries, and it can make payments between them. Or they can merely use existing payment infrastructure (paypal, amazon) to accomplish the same thing. Their corporate structure is a red herring and most likely unrelated to what they've accomplished. "You are right in insisting upon a proper B2B contract in any business relationship. You wish to reduce your risk and be compensated fairly. In addition to the cost and complexity of international wire transfers, the US companies may also be considering the fact that as an international contractor in a relatively hard-to-reach jurisdiction, payments to you place the company at higher risk than payments to a domestic contractor. By insisting upon PayPal or similar transmitters, they are reducing their internal complexity and reducing their financial exposure to unfulfilled/disputed contract terms. Therefore, wire payments are ""hard"" in an internal business sense, as well as in a remittance transfer reporting sense. The internal business procedure will likely be the hardest to overcome--changing risk management is harder than filling out forms." You will be categorized as self employed. Will I have to register myself as a company or can go on unregistered and work You can register a company or can use an umbrella company or work as a sole trader. Remember as a sole trader you are legally responsible for you company's activities, an if a company sues you for your work he can take compensation from your personal assets. As a company your liability ends with the company, if your company is sued. Your personal assets are outside the purview of the lawsuit, but the court can attach that also but those are rare. This doesn't matter if you use an umbrella company. If you intend to be doing this for a short time(maybe a year or so), go for an umbrella company. Else register a company. will take you 5 minutes to form one. Depending on your earning you might need to register for VAT too. A comprehensive guide for self employed on HMRC. what would i need to be sound in uk and to be fit to work online as a freelancer? The same as above. Will it include paying any tax or paying any insurance Yes you have register for National Insurance(NI), before you can pay yourself a salary. The benefit of a company is you pay yourself a minimum salary, below the limit above which you have to contribute for NI, and take the rest as dividends. And pay no tax on it, till you don't exceed the limits. When the money comes in my account, will i be accountable to government of uk, to tell the source of income? If you are operating through a company, yes you would need to show your income(including source) and expenditure when you do your annual returns. What should i be knowing, like health insurance and things that are necessities in uk for a freelancer ? No health insurance as NHS exists. You can take out health insurance if you don't want to get into queues in NHS. Chiming with my experience, because I hate generalizations of an entire country.  I'm Indian, born and raised, but came to the US to do my undergrad/uni and now work out of the US. I had a lot of the same qualms about working with my Indian peers, but I've found that it also depends on the support structure that companies offer. High turnover is definitely an issue, but that seems to be because companies focus more on hiring and less on retention (offering signing bonuses but then little to no continued progress, limited growth opportunities, rigid hierarchy, terrible working hours).  I have someone who reports to me in India now and it's an experiment on how to better engage them, and it's worked better. Turns out you can expect more when you also treat them like an American employee while expecting american results. There are definitely still cultural clashes in work ethic etc. but they can be overcome if you get people to stick around long enough.  Of course, this is anecdotal but that's my two cents. Firstly, check your visa conditions (if you're not from the EU): http://www.ukcisa.org.uk/Information--Advice/Working/How-many-hours-can-you-work You do need to register for NI, but that's apparently streamlined into registering as self-employed: How to pay N.I contributions when both employed and self-employed? (Realistically, you can almost certainly get away with doing <£50 month in cash-in-hand jobs with no paperwork whatsoever, but in the very unlikely event of being caught it could result in being deported) Assuming you are looking at moving your earnings when your tax status in India was NRI; then there are no taxes to be paid when you transfer the money back to India. You can move the funds back to India over a period of 7 years from the day you land.