Working with a EU based company in the UK

[garnet]

Hi
Is it possible to work with an EU registered LTD in the UK? That is if the agency accepts foreign companies, but I dont see why wont they.
Some considerations:
Are there any benefits in terms of taxes? Assuming the income/corporate tax in the country of registration is much less than UK.
Where is the tax payable -at source (UK) or in the country where the business is registered?

I am thinking about the following scheme:
Being an employee of an EU company, I will send myself on an extended (6 months) business trip in the UK. As a result I can claim accommodation, transport, and per day money as expenses and thus subtract the amount from my annual company's tax base.
General example will be (for a month), say, £500 per day paid for services. I will claim 50 for accommodation, 10 transport, 60 for daily money = £120.
So at the and of the month (if no other expenses are incurred) I will have to pay tax (in the EU country) on 22x(500-120)=8360, not 11 000.
Does anyone see any problems with this?

[Jessica@WhiteFieldTax]

With this type of scheme the devil is in the detail. However as a general guide:

(a) individuals are taxed on place of residence

(b) companies are taxed by place of control

If you are in the UK and controlling your company from here then it will be taxed here.

This obviously simplifies pages of tax code and case law.

The starting point, (a) whats your nationality / domicile? (b) Are you currently British resident. If answers are British and Yes, then this is likely to be more risk that reward.

[northernladuk]

Hi
Is it possible to work with an EU registered LTD in the UK? That is if the agency accepts foreign companies, but I dont see why wont they.
Some considerations:
Are there any benefits in terms of taxes? Assuming the income/corporate tax in the country of registration is much less than UK.
Where is the tax payable -at source (UK) or in the country where the business is registered?

I am thinking about the following scheme:
Being an employee of an EU company, I will send myself on an extended (6 months) business trip in the UK. As a result I can claim accommodation, transport, and per day money as expenses and thus subtract the amount from my annual company's tax base.
General example will be (for a month), say, £500 per day paid for services. I will claim 50 for accommodation, 10 transport, 60 for daily money = £120.
So at the and of the month (if no other expenses are incurred) I will have to pay tax (in the EU country) on 22x(500-120)=8360, not 11 000.
Does anyone see any problems with this?

Remember to create an artificual situation to avoid tax is called tax avoidance. Am guessing you are in the UK, want to set up abroad and claim you are in the UK away from your business home base? For real???

Your attention to detail when asking questions on here is just unbelieveable....

[BlasterBates]

Hi
Is it possible to work with an EU registered LTD in the UK? That is if the agency accepts foreign companies, but I dont see why wont they.
Some considerations:
Are there any benefits in terms of taxes? Assuming the income/corporate tax in the country of registration is much less than UK.
Where is the tax payable -at source (UK) or in the country where the business is registered?

I am thinking about the following scheme:
Being an employee of an EU company, I will send myself on an extended (6 months) business trip in the UK. As a result I can claim accommodation, transport, and per day money as expenses and thus subtract the amount from my annual company's tax base.
General example will be (for a month), say, £500 per day paid for services. I will claim 50 for accommodation, 10 transport, 60 for daily money = £120.
So at the and of the month (if no other expenses are incurred) I will have to pay tax (in the EU country) on 22x(500-120)=8360, not 11 000.
Does anyone see any problems with this?

I would set yourself up in the UK. As above, the UK authorities would see you controlling your company in the UK for the duration of your contract. Companies are not indivuduals. i.e. you can't setup a business somewhere and assume it isn't taxable for 6 months.

If you were to set up a business in the UK you might be able to second yourself there from your other company. That might be possible, but complicated I suspect.

Go and see a UK accountant and see an accountant where you're resident and get professional advice. This is a complex area.

[captainham]

If this were legal, we'd all have Ltd's based in the Caymans!

Or at least I would...

[garnet]

If you were to set up a business in the UK you might be able to second yourself there from your other company. That might be possible, but complicated I suspect.

Yes, seconding is the key here. I found that you can second yourself from a foreign company to work in the UK (say, on client's site) for max of 2 years.
Since you will be UK resident (spending 183 days in the UK) you will need to pay income tax on your salary in the UK and then the amounts you've paid will be balanced against your income taxes of the company's country of registration. This way you want be income taxed twice.
Other thing here: as a seconded person you are allowed to travel expenses, accommodation and daily money, which are NOT taxable in the UK.
Anyone know something about this?

[northernladuk]

Hard for us to comment with such wooly information and not answering questions you were asked.

Are you a UK resident just looking to evade tax?

Jessica asked you this a few posts up. Until we know the full story there is no way in hell we can give you a clear answer. If you are a UK citizen with an offshore LTD and are looking to claim expenses while in the UK then god help you. We are not the people to be asking.

More detail if you want any credible advice.

[Sally@InTouch]

Other thing here: as a seconded person you are allowed to travel expenses, accommodation and daily money, which are NOT taxable in the UK.
Anyone know something about this?

As a permanent worker there are travel expense rules that would apply on secondments, but with contracting and you choosing to place yourself abroad I'm thinking that the special rules on foreign travel that we have in the UK, may possibly have similar tax law of the other country, therefore restricting your expenses to flights and the travel to and from the airport only.

You also need to consider that agencies probably wouldn't touch you with a barge pole.

[garnet]

Hard for us to comment with such wooly information and not answering questions you were asked.

Are you a UK resident just looking to evade tax?

Jessica asked you this a few posts up. Until we know the full story there is no way in hell we can give you a clear answer. If you are a UK citizen with an offshore LTD and are looking to claim expenses while in the UK then god help you. We are not the people to be asking.

More detail if you want any credible advice.

I am not UK resident or citizen. Sorry for not mentioning it. I am aware though that if I am seconded for more than 6 months to UK, I will become resident and will need to pay taxes on my salary, which is paid by my overseas company. I wont have any salary paid to me by the UK company I'd work for. This is not a problem.
As for the expenses - it applies to travelling to/from UK to company's country only.
Very interested why agencies wouldn't work with foreign company in that way?

[NotAllThere]

Many agency won't deal with a foreign ltd co, since it is harder for them to determine if you're operating legally, and if you're not, they may end up liable for taxes and NI.

I did work in the UK for a 3 month contract and didn't pay any tax. Probably my company should have paid tax to HMRC on the profit generated by the work in the UK. However, no profit was generated, as all company profit is paid out as salary (no dividend route in my home country), so I didn't think it worth bothering them. With a three month contract and weekly commuting, I was not tax resident, so didn't need to worry about that.