The UK in general, and London in particular, has always been a magnet for professionals, creatives, and freelancers in a range of industries. This has been the case throughout much of history, yet digital technology and the greater emphasis on workplace flexibility have now made it easier to relocate and work remotely from the UK than ever before.
However, since Brexit, there have been some significant changes to UK immigration laws that have, at least for some people, made relocating to London as an independent contractor a little more difficult. This is not to say it’s impossible, but there are some bureaucratic hurdles that need to be overcome that might not have previously been there, regarding visas and working arrangements.
Despite these changes, however, what has always made London attractive for freelancers and creatives is still drawing the best global talent to the capital, and for this reason, London remains one of the most exciting and dynamic cities in the world in which to live and work.
Understanding the visa process
There are a variety of different routes you can follow to get a visa to live and work in London, while the type of visa you can apply for, and what it then entitles you to, will depend on a range of factors. These include whether you are an EU, EEA, or Swiss citizen, or you come from outside the EU, and what your job or profession is.
The UK has a points-based immigration system, which essentially means that if you are able to work in what is deemed a shortage occupation, or you have a relevant PhD, you will earn more points and thus be more likely to be granted a visa to work in the UK. Similarly, if you have a job offer that pays £25,600 or above the going rate for the job, you may be classified as a skilled worker, and so more likely to be granted a work visa.
In addition, the UK’s global talent scheme enables allows highly-skilled scientists and researchers from the EU, EEA and Switzerland to come to the UK, even without a current job offer.
There is also the option to come to the UK to set up a business through a Start-Up visa or an Innovator visa. These are designed for people intending to set up a new and innovative business in the UK that is different to what anyone else is doing in the market.
You can apply and pay for a visa to the UK online, although if you are applying for a work visa from a country outside of the EU, you may need to submit your fingerprints and a photo at an overseas visa application centre.
Relocating as a global contractor
If you relocate to the UK as a freelancer in any sort of industry, you will need to make sure you have appropriate arrangements in place that enable you to be paid as a contractor. There are a variety of methods that can be used, depending on the costs, your preferences, and the capacity of businesses for whom you are providing services.
Most companies that take on independent contractors will have arrangements in place for convenient and accessible bank transfers. If you do choose this method, however, you should establish whether it is you or the organization who pays the associated banking fees, as these can (depending on the institution) be quite expensive. The speed of international transfers may also influence your choice, as some banks and institutions are able to carry these out quicker than others.
If you have the capacity to accept payments via credit cards (these days, you don’t need to be a corporation to be able to do this), that might be an attractive option for both parties (although again the fees can be quite exorbitant). If you are an independent contractor who offers services through a freelancer platform (like Fiverr or Upwork), this can also be a convenient way of getting paid.
For contractors working with companies in a variety of different countries simultaneously, using a money transfer provider is likely to be a cost-effective solution. The technology and broad reach of services like PayPal or Remitly mean they can be significantly cheaper than other global payment methods so that you less money on each invoice to fees.
Finally, if you want to avoid fees altogether, there is the option of being paid in cryptocurrency. Unlike most other payment methods, getting paid in Bitcoin or another crypto means there is no delay while a financial institution holds on to your money for 3 or 4 days. Of course, cryptos have their own downsides. and you need to know the value can rise and fall quite sharply. However, if you already own and use Bitcoin or another cryptocurrency, it’s worth exploring if you can receive cross-border payments in this way.
Dealing with the tax system
Anyone planning on relocating to London to work as a self-employed contractor needs to take particular care to ensure that they are in compliance with UK tax laws.
HMRC considers a person to be self-employed if “they run their business for themselves and take responsibility for its success or failure,” while a contractor can “be self-employed. have the employment status of a worker or have the employment status of an employee if they work for a client and are employed by an agency.”
If you are considered self-employed and thereby running your own business, you are required to undertake a process known as tax self-assessment. This means that you report to HMRC how much money you have earned, and they will determine the amount of tax you are required to pay. If you are a contractor and have the employment status of a worker or an employee, you will likely have your tax automatically deducted from your payment (known as PAYE).
The rate of tax paid is determined by a series of bands. Everyone receives a personal allowance, which means you pay 0% tax on your income up to £12,570. On earnings above this (£12,571 to £50,270) you pay the basic rate tax of 20%, while anyone earning £50,271 to £150,000 will pay 40% higher rate tax. Any income over £150,000 is taxed at the additional rate of 45%.
In addition, anyone working as an independent contractor will be required to pay National Insurance (NI). NI contributions are paid in order to enable individuals to claim certain welfare benefits and the State Pension and are classified as either Class 2 or Class 4.
Class 2 NI is calculated on the number of weeks you are self-employed (provided you earned over the Small Profits Threshold (SPT) of £6,725. As of April 2023, the amount is a flat weekly rate of £3.45. If your profits exceed £12,570, the Lower Profits Limit (LPL), you pay Class 4 National Insurance contributions at a rate of 9% of your profits.
Finding suitable housing
One of the biggest challenges of relocating to London is the cost of housing, regardless of whether you are looking to buy or rent. It is also one of the most expensive cities in the world in which to live (15th in the 2022 Mercer Cost of Living Rankings), and so choosing the right accommodation to suit your budget is essential to be able to survive and thrive as a freelancer or self-employed contractor in London.
You will also find that neighbourhoods in London have their own distinct characters and vibes. For instance, digital nomads tend to gravitate to east London suburbs like Hackney and Shoreditch, while south of the river Clapham and Brixton have their own energy and are ideal for finding a house or flat share.
Fulham and Chelsea in west London have long been regarded as innovative centres of art and fashion and are popular hubs for start-ups and other digital enterprises.
An innovative and straightforward way to find appropriate housing in London (or anywhere else), is to join a CoLiving program like Selina, which provides month-on-month accommodation for digital nomads in a collaborative environment with other like-minded professionals in a range of industries.
Summing up
The prospect of relocating to London as an independent contractor is an enticing one, as it’s a city where global talent gathers and there are abundant opportunities across an array of industries.
However, to make the most of the move, it pays to look ahead so that everything progresses as smoothly as possible. It’s important to understand the tax and compliance laws, as well as the visa and immigration system so that you don’t get embroiled in red tape.
It also makes sense to check out the housing options in advance, to find the right sort of neighbourhood to suit your work and lifestyle, and which also fits your budget.