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Complexity of subcontracting work to India?

Can you easily pay an entity based in India from the UK

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Hi all,

We use a well-known accountancy firm based in the UK and for many years was supplied a junior accountant from them to come in and prepare our end of year accounts before sign off - of which he was excellent!

For family reasons a couple of years ago, this individual had to move back to India and more recently he has been back in contact to see if we could find him some work as my business is in recruitment. Having various tasks ourselves that need someone, I was wondering how complex the process was of subcontracting work, or being billed by someone in India to perform such tasks remotely?

Having only ever employed or contracted Limited's for services for our business in the UK, I am confused how easy/complex this would prove to be and understand we would have to take precautions over various elements like GDPR, however how do the mechanics of paying someone like this work?

Knowing that many companies in the UK, including our own accountants, outsource work to India I am sure there is a tried and tested method of doing so, however if anyone can point me in the right direction I would be ever so grateful.

Regards,

Dave

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By paul.benny
20th Aug 2021 14:23

What exactly are you asking about - the logistics of continuing to use the same person for the same work as an independent contractor. Or of being an intermediary for other work this person might do for third parties?

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By Dave Simmons
20th Aug 2021 15:45

Hi Paul,

Thanks for the reply.

We are looking to use him as an independant contractor for ad hoc projects for our UK based business.

I am confused as to whether we get invoiced and just pay the invoice, or whether the process is more complex.

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By David Ex
20th Aug 2021 16:28

You said you “use a well-known accountancy firm” so the obvious thing would be to seek their advice. You are entitled to use third parties to provide accounting services.

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By paul.benny
20th Aug 2021 17:10

In principle, no (accounting) barriers.

- You'll need to reverse charge to account for VAT (see https://www.gov.uk/vat-on-services-from-abroad)
- If he's not billing you in GBP, you have some exchange rate risk
- Foreign payments can be quite costly, so minimise the number you make to him.
- Your contractor is responsible for his own tax filings in India.

As you note, GDPR is an important consideration and there may be other legal commercial or practical considerations. I'd be extremely wary about letting him have access into your IT (ie don't permit it).

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