UK limited, non-UK resident | Salary and corporation tax

[sinsis]

Hi!

Is there anyone out there with a UK limited company that doesn't live in the UK? I'm rather confused as to how I should pay myself. I live in the EU, have a UK limited company and am not a UK tax resident (meaning -if I'm right- 0% income tax in the UK, but instead paying it in my host country).

According to a friend, this would mean that if I deduct 100% of my earnings as salary, it would mean I wouldn't have to pay any corporation tax (because corporation tax is payed after profit, meaning 100% salary = 0 profit). Is this right? I spoke to a UK based accountant a while back and he suggested paying corporation tax in the UK, then asking an accountant in my host country for advice on how to pay myself. This conflicts with the above.

Bonus question: if there's anyone out there with a small UK limited (I expect my turnover to be very low), could you please share your opinion/experience on doing your own taxes vs an accountant? I see mixed opinions floating about.

Cheers!

[NotAllThere]

What country are you resident in?

[TheCyclingProgrammer]

Yes, paying all your earnings as salary to reduce company profits to zero would mean no CT liability in the UK for your Ltd.

Why do you want to do it this way? Preferable tax rates for employment income over dividends?

[stek]

Yes, paying all your earnings as salary to reduce company profits to zero would mean no CT liability in the UK for your Ltd. However, I believe you need to arrange with HMRC to pay yourself your salary as gross and then declare the income in the country you are tax resident and pay tax on it there. Otherwise, if YourCo pays you net of UK tax, you'll then have to go through the hassle of reclaiming it or offsetting it against tax paid where you are now (subject to any double taxation treaties).

Why do you want to do it this way? Preferable tax rates for employment income over dividends?

I don't think that's correct, OP would pay UK PAYE/NI as normal and then offset that against local tax burden subject to DTA and either pay more locally or more to HMRC, whichever is higher.

[Jessica@WhiteFieldTax]

In principle, yes, 100% of company gross profit as salary to minimise CT, but

1 you need to think about NI, dependant on host country you may still be in UK NI system, so you have employers and employees on that high salary

2 you need, as I think you appreciate, host country advice.

For the uk, I would talk to an accountant here once you are clear on host country position.

[TheCyclingProgrammer]

I don't think that's correct, OP would pay UK PAYE/NI as normal and then offset that against local tax burden subject to DTA and either pay more locally or more to HMRC, whichever is higher.

Yes I was getting confused, I was thinking of something else.

[VectraMan]

I don't think that's correct, OP would pay UK PAYE/NI as normal and then offset that against local tax burden subject to DTA and either pay more locally or more to HMRC, whichever is higher.

That seems like a complicated way of doing it. Surely it'd be far better to pay the salary wherever you are and not bother the UK authorities with any of it. That's if you are paying a salary. He was suggesting a small part-time business, in which case it may be dividends only.

The other part of this is that even though it's a UK company if it's "managed" abroad then it'll also be tax resident abroad. Presumably even if the profits are zero you'll still be required to register and submit returns where you are, and still will need to do the same for the UK.

I do my accounts/tax myself. It's easy enough when it's simple.