Science: Why Britain is IT abroad: From Saudi Arabia to San Francisco, our computer contractors are in demand. Lynne Curry reports

Bryan Harris has been writing his account of working in the Middle East, a sort of daylight Arabian Nights.

Over three issues he thrilled readers of the Freelance Informer, the contractors' trade publication (which coined the expression 'Bryan of Arabia') with cameos of life as an ex-pat contractor. Kamikaze waiters who pranged his car, the random nature of pay day, the shock of being burnt by a hot car steering wheel . . .

This month the magazine used a piece from Chris Rooney, who spent five months of a year-long contract in Volgograd, living in a Portakabin in a fenced compound, covering his nose in temperatures of -22C, wiping his feet on a cardboard doormat and every morning sweeping from his disk-drive the clouds of steelworks dust that had blown in through the ventilators.

Nothing so bleak awaits those whose contracts take them to San Francisco. Only the IRS lurks there, the Stateside cousins of the Inland Revenue, armed with sheaves of papers detailing the nightmarish US tax laws and President Clinton's benedictions on netting more for the collective fund. Even old hands in the exported labour market tread gingerly through the labyrinthine regulations.

Still, Europe is bound to be painless, seeing as we're all semi-resident in the Dordogne and consuming liver sausage by the kilo? Not exactly.

On arrival in Germany, the conscientious contractor who has accepted perceived wisdom and formed a limited company is obliged to declare that he owns and controls his company. If he or she fails to do this, it is an offence punishable by a fine or imprisonment. If he or she does claim ownership, the Germans promptly declare the company non-existent (they do not recognise single-person limited companies) and tax the gross earnings.

All true. So why are British agencies happily recruiting contractors to send abroad? Why are British contractors happily stepping on aircraft for a year away from home, possibly in a seafront apartment in Nice but also possibly for a mobile home in a blizzard?

Why did Philip Swinstead, chief executive of the recently merged CSS/Comac, the biggest information technology (IT) contract staff agency in Britain, declare Europe was its focus for future expansion? Moreover, why should companies in Europe or the United States be interested in British computer contractors?

Chad Neal, an American, of Brighton- based Eurolink, thinks that British contractors are well worth exporting. 'The English IT market tends to experiment a lot more than its counterpart on the Continent. The US is probably ahead in new hardware and software but not in terms of taking risks and adventure.

'One area that illustrates this is that of client-server. Forty-one per cent of British companies have plans to go over to this (away from mainframe systems), compared with 25 per cent in the US and 30 per cent in Europe.'

British contractors, he says, are admired overseas for being 'very technically minded and for having a strong work ethic'. In the US, they can also be cheaper to the company, but even if they earn lower rates than their American counterparts, says Mr Neal, they can still enjoy a pleasant standard of living.

'I often tell people that even if they're going on a lower rate, they're still within the top 5 per cent of all American earners.' They would usually earn between dollars 35 and dollars 40 ( pounds 21 to pounds 28) an hour, with some receiving dollars 50, giving a basic weekly wage of at least pounds 900.

Eurolink, a small player, has fewer than 100 employees but has an annual turnover of pounds 25 million and offices in New York, Los Angeles, San Francisco and Sydney. 'The majority want to go for the location, the standard of living, the weather, the educational opportunities, the wish to work for an American company, which has a different corporate culture,' says Mr Neal. But it is Australia that attracts the most emigrants, although the pay rates are lower than almost everywhere else.

Hestair Computer Group, based in Harrow, has offices in Amsterdam and Germany, covering France, Germany, Benelux and Scandinavia. It sends contractors to the US and has taken its first steps in Eastern Europe. Julian Nicholls, managing director, said that, increasingly, Europe was perceived as one market.

'Multinational global companies will have one or two system centres in Europe. If you want to do business with Company X in the UK, its main system development or processing may be in another country altogether. If you want to work long term, you must provide it with a service spanning more than one country.

'If you're in a complex skills area, the number of customers using those skills may not be a handful, but they are certainly not common.' Airlines worldwide use TPF, a complicated software system little used by anyone else. An agency that can call on contractors familiar with TPF has a particular strength to offer abroad.

Britain also has a longer history of contracting - in France, freelancing is hardly recognised, and there are few established agencies. 'In many other countries there hasn't been a big pool of contractors,' said Mr Nicholls. 'They have typically worked through software houses. We are now building a comprehensive database of German, French and Dutch nationals.'

Agencies that send contractors abroad usually have information packages to minimise the inevitable painful bits of going to an interesting foreign country and earning (hopefully) lots of money and having (hopefully) lots of interesting and enriching experiences. The packages cover visas, work permits, residency and accommodation and give basic guidance on unavoidable obligations such as tax.

Tax abroad - a dirty phrase in any contractor's book - is a jungle so tangled that many turn to international tax consultancies, which are obliged to tell them that many of the old loopholes for skipping tax have been closed.

Simon Weeden, a consultant to the tax consultancy TSW International, said that Britain retains the right to tax anyone who spends fewer than 183 days out of the country on a contract. Between 183 days and 365 days, primary taxation passes to the host country, with Britain still having a right to secondary tax if any is payable (the tax paid abroad is counted against this).

The most lucrative arrangement is for contractors to spend a whole year out of the country, not returning for more than 62 days. In this case, the host country has the right to tax income earned under a properly structured remuneration package.

Unearned income and dividends, however, often remain taxable here. Self-employed people have to stay out of the country for an entire tax year to qualify for exemption on these. Contractors with a limited company agree a contract with that company. It takes expert advice to maximise earnings.

'There is more and more anti-avoidance legislation coming out of Europe,' said Mr Weeden. The French have particularly draconian powers, imposing taxes of up to 56 per cent and arguing that as the single-person limited company is being managed and controlled in France, it should pay the same, considerable, contributions as French companies.

Germany, Holland and Switzerland have their own bespoke minefields. But, generally, higher rates are among the compensations, said Mr Weeden. TSW offers ex-pat packages for pounds 500 plus VAT to look after an individual's finances for a year. Set against earnings of pounds 1,500 a week in tax-free Saudi Arabia, this can look quite piffling.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Sales Executive or Senior Sales Executive - B2B Exhibitions

£18000 - £30000 per annum: Recruitment Genius: A Sales Executive or Senior Sal...

Recruitment Genius: Head of Support Services

£40000 - £55000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Warehouse Team Leader

£22000 per annum: Recruitment Genius: This industry leading company produces h...

Recruitment Genius: Business Development Manager / Sales - OTE £40,000

£20000 - £40000 per annum: Recruitment Genius: This IT provider for the educat...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory