Head for the sun

With the UK market for IT contractors hit hard by the economic downturn, it might be worth looking for work in sunnier climes....

With the UK market for IT contractors hit hard by the economic downturn, it might be worth looking for work in sunnier climes. Karl Cushing considers the prospects

With the UK contracting market firmly in the doldrums, and the money and opportunities drying up, many IT contractors are trying their luck overseas.

For many contractors, the current economic climate, where companies are reluctant to pay for what they see as "expensive" IT contract staff, has been compounded by a feeling that the Government has taken a harsh stance against the contracting community with the so-called "stealth tax" IR35.

"Other than the market downturn, the main problem contractors face in the UK is still IR35," says Jane Akshar, chairwoman of the Professional Contractors Group. Two other key problems are finding work and rates of pay.

For those contractors who are tired of battening down the hatches and riding it out in the UK, relocating overseas might seem like an appealing alternative. But there are a number of issues that need to be considered beforehand and the bottom line is "do your homework".

Some recruitment agencies specialise in placing contract staff overseas and can be a good source of practical advice

on areas such as tax, accommodation and health insurance. However, for those choosing to go it alone, the first consideration is likely to be choosing which country to work in. This will probably boil down to a case of "to EU or not to EU?"

Nowadays, movement of labour within the European Union has never been easier, although demand, rates of pay and conditions vary enormously.

It is arguably more difficult to work outside of the EU, but Eastern Europe is worth considering - as are English-speaking areas such as North America and Australasia.

It is worth researching which other countries have variants of IR35, says Akshar. Australia has its Alienation of Personal Service Companies Act, and the US and some other European countries abide by similar legislation.

Conditions in Germany, Holland and France are currently favourable for contracting, while opportunities in the US have decreased, says Akshar.

However, contractor Nick Robinson says the US or Canada should be the key targets for UK contractors, followed by countries in the EU and then countries outside the EU.

Robinson says the US contracting market has "gone all xenophobic" since 11 September. The result has been an increase in demand for contractors from "friendly" countries like the UK over contractors from Asia and the Indian sub-continent, particularly for government contracts.

Marc Deveaux, a UK contractor who relocated to New York, says he receives a number of e-mails from other IT contractors inquiring about the situation in the US. However, a lot of people get caught up in the US visa system, he warns.

Swotting up on the legal and financial issues, such as tax compliance, is also essential. Factors such as whether your prospective country requires a work permit for non-nationals; whether you will be responsible for travel and accommodation expenses; hourly rates of pay; and the cost of living should be considered well before, and not after, you touch down on the tarmac at your chosen destination.

Then there are language and cultural issues. The language barrier is unlikely to be much of an issue in Benelux or Scandinavian countries but probably will be in countries such as Spain or Poland.

One contractor now working in Sweden, who asked not be named, points to the importance of adapting to cultural differences when working abroad and adjusting to the fact that "people think differently". He says that whereas in Germany people are much more direct than in the UK, in Sweden they are much more consensual, meaning you will have to learn to adapt to the "mood" of a meeting.

Although these issues can make the prospect sound daunting, working abroad in any capacity is always going to be an interesting experience in one way or another, whether it be spiritually, culturally, financially or a combination of the three.

The experience you gain could ultimately be positive for both your career and the UK IT industry if you bring new skills back to the UK in the future. So what are you waiting for?

What you need to do before you go
  • Find out which of your skills will be in demand
  • Find out if you need a work permit and/or a visa
  • Get good legal and financial advice before you go
  • If IR35 has played apart in your decision to leave, check that the country that you are going to does not have a similar tax
  • Find out if you will be responsible for costs like travel and accommodation

  • Address the language issues (shouldn't really be much of a problem after Cobol or HTML).

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