What Exactly Are Working Holiday Visas?
United Kingdom Working Holiday Visas permit young foreign nationals (normally aged between 17 and 30 years old) of certain countries to come to the UK to travel and work. UK working holiday visas are two year visas and people are entitled to work for a total of 12 months out of that two years either sporadically or consecutively. The Working Holiday Visa scheme was part of a number of reciprocal agreements with other countries that allow young people to work and travel to new places. It is an excellent way to fund a long trip abroad. It is now referred to (as of last year) as the Youth Mobility Scheme – Working Holiday.
How Do the Working Holiday Visas Work?
Exactly as described above – the visas permit people to come to the UK for an extended stay/holiday of up to 24 months. The work permit that accompanies the visa states that you can work for a total of 12 of those 24 months in any job in the UK, although there are a couple of exceptions (such as sports people). You cannot use the Working Holiday Visa to set up a business in the UK. As part of the visa you are permitted to leave the country (the UK) as many times as you want but there is no pausing the two years you have been allocated. Also, you can only ever have one UK Working Holiday Visa.
What About Recent Changes to the Working Holiday Visa?
As part of their shake up of Immigration regulations the Border Agency recently changed the UK Working Holiday Visa programme to a new Youth Mobility Scheme. This is almost exactly the same scheme with a new name, although there are a couple of changes outlined below.
How to Apply for the Youth Mobility Scheme – Working Holiday
The new Youth Mobility Scheme is found in Tier Five of the Border Agency’s tier and points based system. People wishing to apply should go the tier five page on the border agency website and first check whether their country has a reciprocal agreement with the UK to allow them to apply for the Tier 5 Youth Mobility Scheme. It is worth noting that the number of countries who are part of the scheme has been cut significantly under the new programme. As it stands at the moment only people from the following countries are eligible for the Youth Mobility Scheme:
- New Zealand.
In order to be approved for the Youth Mobility Scheme you need to achieve a score of 50 on the PBS (Points Based System). The points are normally allocated with 30 for nationality, 10 for age and 10 for the amount of maintenance you will have. In addition to the countries listed above you can get the full 30 points if you are a British national overseas, a British overseas territories citizen or a British overseas citizen. To get the full 10 points for age you must be 18 by the date that your visa would become valid and under the age of 31 when you are applying for the scheme. Finally, to get the full 10 points for maintenance you must be able to prove (at the time you apply) that you have funds in excess of £1800 in cash.
Conditions of your Youth Mobility Scheme Visa
The conditions for the Youth Mobility Scheme are almost the same as for the old Working Visa Holiday programme. People who have previously used the Working Visa Scheme (or the new Youth Mobility Scheme) cannot take advantage of it a second time. However, under the new changes applicants can now stay for two years and work the entire two years if they so wish, but they still cannot work in professional sports nor set up their own business. They are also not permitted to work as trainee doctors. They do not need sponsorship from employers.
Compared to many countries across the world the UK is an affluent country and a good place to earn a living if you have a skill to offer. Standards of living are good (although the major cities – particularly London – can be prohibitively expensive sometimes) and work is plentiful even now when the economy is still recovering from recession. The major cities are obviously the first place to start and you will find them to be exciting, dynamic and hectic places to live and work, but there is work out there depending on your skills and when you arrive. Coming to the UK in the months just before Christmas is always a good idea as there is a lot of work around at this time in retail and temporary jobs, but after Christmas the opposite is true and recruitment in every sector from retail to office work tends to be a lot slower. For skilled contractors however there tends to be work year round and they always seem to be in demand. The UK contracting market is increasing every year and contractors from certain sectors (IT, Telecoms, Oil and Gas, Energy) will never have any problems finding work. Additionally most contractors and freelancers will find the UK to be extremely lucrative both in terms of the higher rates of pay on offer as well as some decent tax advantages that have been given to the contracting sector. Add to that the strength of Sterling compared to most countries and it is clear that most workers from abroad can earn a great deal once they have got themselves a job.
Getting a Work Visa
Aside from citizens of the EEA (European Economic Area) and Swiss nationals, everyone who comes to the UK to work will need to get themselves a work visa. This should either ideally be arranged before you arrive in the country (at the British Overseas Mission in your home country) or at the UK Border Agency once you are in the country. You can find out more about UK Work Visas here.
Looking For Work
Finding work in the UK is a case of trawling through various different resources to get to the job listings that interest you. Firstly you will find job listings for the area where you are living in the local papers for that area. These will normally be jobs in local companies as well as jobs in retail, bars, offices and other small businesses. Additionally a good resource for finding local jobs will be the local job centre which will normally have a list of every job going in the area. For jobs with larger, national companies you can look to the national newspapers as well sign up with local recruitment agencies which will be able to link you up with jobs both locally and nationwide. These recruitment companies all have websites online which list all of the jobs currently on the market and which are a good place to start. Sign up with these and post your CV (having a CV / Resume is a must when job hunting in the UK) online to get in first with the latest job prospects. For contractors
For contractors there are a number of specialist contractor sites dedicated to finding them work. Depending on whether you want to join an agency or work direct with clients yourself there are different options in each department. If you prefer to deal directly with the clients then find a number of contractor job boards, register, upload your CV and start speaking to the clients. If you prefer to let an agency handle that stuff then do some research to find a good agency for your sector (there are agencies that specialise in IT, Telecoms etc) and send them your details. One tip – these days so much is handled online and agencies / clients are often bombarded with so many CV’s that it doesn’t hurt to phone them and introduce yourself. It is a good way of getting your name to the top of the pile and a more amiable and considerate approach. Lastly, most websites will offer a job alert feature which means they email you daily to let you know the latest jobs that have arrived. Make sure you sign up to this service as it helps you to get your application to the top of the pile.
Looking for Work Before You Arrive
For contractors coming to the UK it is worth signing up to these sites ahead of time and registering with specialist contracting sites to get an idea of what clients are looking for and how much you can earn with your skills. Contractors, particularly those with specialist skills (such as in IT, Telecoms and Oil & Gas), might find that clients and agencies want them so badly they are able to help them sort the required visas ahead of time so it is well worth planning ahead.
Living and working in the Uk is fairly easy compared to most places around the world and the levels of red tape and bureaucracy involved are not too bad. Nevertheless it is worth running through the basics before you go so you can be sure you have everything you need and know how it all works.
How Can I Open A Bank Account in the UK?
Setting up a British bank account is a relatively painless affair. All you will need is your passport, statements from the last three months from your home current account and a letter from your landlord proving your new address and declaring how long you will be staying there. Many banks will also like to see a utility bill or some other official proof of your new UK address.
If you are well organised you can also set up a bank account via the internet before you leave your home country. There are a number of companies that will do this on your behalf for a small charge. If you can afford it this is a very useful and convenient option. Similarly these days most banks are global so it may well be easier to talk to your bank and see if they have branches in the UK and if they can help you with your move and in setting up an account in Britain.
What Paperwork Will I Need to Start Work in the UK?
Aside from your work visa you will also need both a UK bank account and your own National Insurance (NI) number. This is used to recognise who you are for tax purposes and you need one before any employer will take you on – you give them your number so that you end up paying the correct taxation level. Once you are working you can get an NI card at your local job centre plus.
What Paperwork Will I Need if I am Contracting?
If you have come to the Uk to work as a contractor then you will still need a NI number and bank account but your pay and taxes will be handled differently as you are going to be self-employed. In that case, you need to either set up a Limited Company (which is done via Companies House) or work through an Umbrella Company. Both types of company have their advantages and disadvantages and you can find out more about the differences between the two here.
The UK Tax System in Brief
Taxation in the UK, as with most countries, is no simple matter.It is often convoluted, laborious and difficult to follow. However, for new arrivals to the country the most important thing to understand is the NI number. Once you have this you can at least get started. Here are a few of the most important terms you will come across:
National Insurance Number – As mentioned above, this is a requirement for all employment and the first thing you should apply for. Your NI number will be personal to you and will measure and determine how much tax you pay and then how much benefits you can claim (and should you stay in the country how much retirement income you can claim). It is also the number you need when you wish to reclaim tax before leaving the UK.
National Insurance – The National Insurance itself is a small percentage of your weekly/monthly salary that is deducted and paid into a fund. As a worker you will always be required to pay Employee National Insurance and sometimes contractors and business owners will also have to pay a contribution to Employer National Insurance.
Personal Tax Code - Your personal tax code is individual to you and indicates the amount of tax you must pay every year and the amount of free tax you are entitled to earn. It is used by employers and/or pension providers to work out the precise amount of tax to take from your salary and to pay into your pension. The code itself is normally made up of a combination of letters and numbers, such as 119L or K459. Should your tax code be followed by a letter then you know that by multiplying the number contained in your tax code x10 you will be able to see the total amount of income you are permitted to earn in a given year before you have to pay tax. The letter is there to indicate how that number should be changed after any changes to your allowance have been announced by the Chancellor. For more information about the various letters and numbers click here.
Personal Income Tax – This term is self-explanatory. Your personal income tax is the tax you are liable to pay on your earnings. Everyone (bar those people earning less than £10,500) must pay income tax in the UK and that income tax is calculated based on the level of income.
P45 – Your P45 is a form you will be given when you leave work. Your old company will give you a P45 and you should then take this with you and hand it over to the next company that employs you. This is done so that your earnings and taxation can be calculated properly without any gaps or mistakes.
P60 – The P60 is a form that comes on the 5th April at the end of the UK tax year. On the P60 you will find the total amount of your earnings for that year and the total amount of tax paid. The P60 is an impotent form that needs to be kept because it contains the record of all your tax deductions.
VAT – VAT (or Value Added Tax) is a sales tax that is administered and collected through HM Revenue and Customs. VAT is applied to most purchases in the UK and is normally included in the price. For more information click here.
The UK contracting market is growing every year and is one of the most lucrative in the world for people with the right skills. Freelancers are employed in great numbers across most occupations including artistic, literary and media related work, managers and administrators, teaching and education and energy industry contracting. The largest and most lucrative contracting work is found in Information Technology work and highly skilled IT contractors will find great rewards in the UK market.
Will I Need a Work Visa to Contract in the UK?
In a nutshell, yes. Contractors who are not citizens of the UK and who come from countries outside of the EU will invariably need to apply for a visa in order to legally work in the United Kingdom. The granting of a working visa allows them to be classified as visa nationals in the eyes of the UK Border Authority.
Which Nationalities Are Required to Apply for Visas?
Any contractors from countries within the EU are free to work in the UK at any time without the need for a visa although they will of course still need to produce certain identity documents in order to register with various services and authorities and to arrange a bank account. As well as these contractors from the countries of Liechtenstein, Norway and Iceland are also able to work and live in the United Kingdom as part of the larger EEA (European Economic Area). Similarly there are bilateral agreements between Switzerland and the United Kingdom so that their contractors also have the same rights.
Contractors from any country other than those mentioned above must go through the UK Border Agency’s PBS (Points Based System) to apply for a working visa. There are five tiers to this PBS but the one that will be most relevant to contractors currently is Tier Two relating to skilled workers. For many years the most appropriate category was Their One (General) but this has been closed to any new applicants for some time. Other possible routes for contractors include being a citizen of the Commonwealth and applying via the UK ancestry category. Alternatively, if they are between 18 and 30 and from a participating country contractors could try to get a working holiday visa for a year and then apply from within the UK.
Applying for a Visa to Contract in the UK
As mentioned above the only routes currently available to contractors outside of the EU are either to apply as an ‘exceptional talent’ under the Tier One category or to prove that they have one of the skills detailed on the Border Agency’s Shortage Occupation List, have a contract in hand and a sponsor and are therefore eligible to receive a Tier Two Skilled Worker visa. Once they have decided which tier they wish to apply through the next step is to go to the UK Border Agency website and go through the PBS Calculator to see how many qualifying points they have from the criteria listed (such as personal financial worth, income, age, skills and qualifications as well as knowledge of English and any experience of having already worked in the UK). Should they have enough points there are then different application instructions depending on which tier is being used. These must be stuck to rigidly – failure to do so can void the whole application.
Applying for a UK Visa Through an Immigration Advisor
Many contractors will decide that it is worth the money to pay an immigration advisor to apply on their behalf as it will save them time and ensure that they dot all their i’s and cross all their t’s. This is a good idea provided that they can (a) afford to pay for such services and (b) are careful in their choice of advisors. Lawyers who specialise in immigration and professional immigration advisors are all closely regulated by the OISC (the Office of the Immigration Services Commissioner) as well as by the Law Society of England and Wales (or the Law Societies of Scotland and Northern Ireland). Any advisor being considered should be researched and checked with one of these bodies to ensure they are genuine. There are many, many unregulated and unscrupulous immigration advisors who would happily offer the world and deliver nothing.
People come from all over the world to contract in the UK and it is easy to see why. The contracting market in Britain grows every year and is amongst the best paid places to work for freelancers and contractors across numerous industries. For many contractors it offers a route to a higher standard of living and the chance to build up significant savings before returning back to their country of origin. And aside from the increased earnings potential and the flexibility of contracting many contractors choose to come to the Uk simply to work in a different culture, train their professional skills in a different environment and improve their grasp of the English language.
There are contracting positions across most of the UK employment sectors including administration and management, teaching and education and the creative industries (such as media, literary and artistic). But the greatest opportunities are in those sectors where contractors of a technical and highly skilled background are required, such as oil, gas and energy, engineering, telecoms and IT. In these sectors the rewards are far higher than most other places around the world and contractors would be working with world leaders in their chosen field.
The Financial Benefits of Contracting in the UK
Not only does the UK offer significant rewards for freelancers and contractors, it also offers tax advantages for people who choose to work in this way. Contractors, whether from the UK or as expats working in the UK, can earn more than regular employees not just through their higher salary rates but also by contracting though their own Limited Company or through something called an Umbrella Company. Umbrella companies are one of the many tax planning vehicles that contractors can use to bring down the amount of tax they are liable and therefore simultaneously increase the amount of pay they can take home. For contractors the UK tax regime offers some very generous rates and offsets and also does not stipulate many requirements for people who wish to move their earnings around the world. It is, in other words, a great place for contractors to make money.
The Professional Benefits of Contracting in the UK
The United Kingdom is still a highly respected and market leading destination across many sectors including finance and business, IT and engineering as well as science and medicine. That is why so many large international corporations base their headquarters here or at the very least have major operations throughout Great Britain. Additionally the UK offers some of the world’s finest universities and educational establishments and with them thousands of world class research institutes. Contractors coming to the UK cannot help but benefit from being in such an environment, offering high-tech, cutting edge roles that they might not find back in their home country. And the fact that so many contractors do come to the UK to work makes the environment that they all work in together even more vibrant, exciting and global.
Being a part of that environment offers incredible opportunities for training, industry accreditation and professional advancement. Indeed the UK tax regime also allows contractors to offset their training costs against their tax returns.
The Freedom of Contracting in the UK
The main benefit of contracting for most people has always been the opportunity to be your own boss. In the UK this benefit allows contractors to have genuine control over the contracts they choose and how those contracts are managed. For example, in Britain when someone wants something done that was not in the original contract they can ask but the contractor is permitted to say ‘no thanks, not in the contract’. Alternatively they can simply renegotiate the contract to a higher rate to take into account the extra work.
As well as this there is so much contracting work available in the Uk that successful contractors will have the freedom to pick and choose which contracts suit them best, whether because they enjoy them or because they will help their professional advancement. Of course this might not be true when starting out, but once established contractors will benefit from far greater freedom than their salaried counterparts.
Lifestyle Benefits of Contracting in the UK
This freedom and flexibility of contracting extends to the way contractors run their business. Contractors in the UK, once established, have freedom to choose when they want to work and when they don’t, when they want to have a holiday and how long for, and how long they want a contract for, from a month to three months or six months to a year and beyond. On longer contracts clients are normally flexible about time off if all the pre-agreed goals are being met although unlike regular employment this time off would not be paid.
As well as being a great place to live and offering some of the most famous cities in the world to live in, the benefits of contracting in the UK are significant and well worth applying for. It is why so many people contract here – at last count there were nearly 2 million UK contractors – and why people come from all over the world to do so.
Work visas in the UK are organised via a 5 tier points-based system that all migrants outside of the EEA (European Economic Ares) need to negotiate if they wish to work, study, train or invest in the country. Applicants are separated into one of the five tiers and in order to gain eligibility for their visa in those tiers they must gain enough points in the assessment. When it comes to applications for work visas points are normally awarded on the basis of the ability of the applicant as well as their age and experience. The Five Tiers are organised as follows:
Tier One – Tier One visas are awarded to people who are considered to be ‘high-value migrants’ and who come from outside of the EEA. The category covers applicants who are investors, entrepreneurs and those of ‘exceptional talent.’
Tier Two – Tier Two visas are visas for skilled workers who come from outside the EEA but who have an offer of a job in the UK. Included in this category are skilled workers who are being brought to the UK by international companies as well as skilled workers who can fill a role for which there is a skill shortage.
Tier Three – Tier three visas are visas for low skilled workers who are brought in to fill very specific gaps in the labour market in the United Kingdom. However it has rarely been used.
Tier Four – Tier four visas are for students from foreign countries outside of the EEA who are looking to study in the United Kingdom. In order to qualify for this visa students must already be registered with a British educational establishment.
Tier Five – Tier five visas are for six different types of temporary worker including religious workers, charity workers, sports people and creative workers. It also covers the youth mobility scheme which deals with working holiday schemes for young people.
Most visas will be issued via tier one, tier two and tier five and the most common of these are listed below:
Tier One Entrepreneur Visa – for people looking to set up and business in the UK and who have in excess of £50,000 available in investment funds.
Tier One Exceptional Talent Visa – for people who have been endorsed by designated bodies as being potential ‘leaders’ in sciences or the arts.
Tier One General Visa – for people who are applying to the highly skilled migrant program.
Tier One Graduate Entrepreneur Visa – for people/graduates who have been endorsed for their business idea.
Tier One Investor Visa – for investors who are able and willing to invest in excess of £1,000,000 in the United Kingdom.
Tier Two Priority Visa – for type two visa decisions within 10 days using a priority application service.
Tier Two General Visa – for people who have been offered skilled jobs in the UK.
Tier Two Intra Company Transfer Visa – for graduate trainees or staff going through a skills transfer.
Tier Two Minister of Religion Visa – for jobs in the faith community.
Tier Two Sportsperson Visa – for elite sports people or sports coaches with sponsorship.
Tier Five Temporary Worker (Government Authorised Exchange) Visa - for people taking part in international exchanges to do with research, experience, fellowship or training.
Tier Five Temporary Worker (International Agreement) Visa – for people working under international law (such as in diplomatic households).
Tier Five Temporary Worker (Charity) Visa – for people coming to the UK to take part in (unpaid) charity work.
Tier Five Temporary Worker (Sports or Creative) Visa – for creative or sporting people coming to the UK to work.
Tier Five Temporary Worker (Religious Workers) Visa – for people coming to the UK to do religious work.
Domestic Workers Visa – for employees in private households who have worked for their employer for at least one year.
Overseas Business Representative Visa – for applicants who wish to come to the United Kingdom as representatives of overseas businesses, news agencies or newspapers.
UK Ancestry Visa – for applicants who are citizens of the Commonwealth and who are able to prove that one of their grandparents was born in the United Kingdom.