Having Estonian e-resident company and expensing my UK limited company

[Vivicou]

Hello,
I am thinking to use an Estonian company because of Brexit in case it is turning bad and to have Euro in the bank instead of pound.

Now I am wondering if it possible to invoice my UK limited company with the Estonian one so that my expenses are going thought the Estonian one.
For exemple, my Estonian company would provide the accommodation, food and other living cost to the UK limited company. I will need to create a monthly invoice with all cost from the Estonian company to the UK limited company.

The problem is that I am wondering if it is legal ?

Thanks

[Lance]

I'm not aware that it is explicitly illegal.

However if you gain a tax advantage from it, and it is deemed that the setup has been done purely for that purpose then it falls under GAAR.
https://www.gov.uk/government/public...ti-abuse-rules

It would certainly increase your chances of an investigation.
Wouldn't you be better off to run a normal UK business and invest your personal cash in Euros (Bitcoins, USD, gold etc.) as you desire?

[malvolio]

If you are UK resident and earning money in the UK then you have to pay UK taxes. Your suggested arrangement will still result in a BIK charge on you personally. The taxman would most likely see this as a sham arrangement (even if it isn't) and assume you are trying to evade taxes.

So yes, it is legal, just a very bad idea.

Instead, why not move your UK profits into a Euro bank account. Not that you need to anyway, the pound may go down - or even up - post Brexit but it isn't going to fail.

[northernladuk]

I'm not aware that it is explicitly illegal.

However if you gain a tax advantage from it, and it is deemed that the setup has been done purely for that purpose then it falls under GAAR.
https://www.gov.uk/government/public...ti-abuse-rules

It would certainly increase your chances of an investigation.
Wouldn't you be better off to run a normal UK business and invest your personal cash in Euros (Bitcoins, USD, gold etc.) as you desire?

You sure that's right?

[Lance]

You sure that's right?

Yup.
Sentence 1 is completely accurate.
Sentence 2 seems pretty good.
Sentence 3 is pure speculation, but I still believe accurate.
Sentence 4 is just common sense.

What do you think is wrong?

[northernladuk]

Yup.
Sentence 1 is completely accurate.
Sentence 2 seems pretty good.
Sentence 3 is pure speculation, but I still believe accurate.
Sentence 4 is just common sense.

What do you think is wrong?

Dunno. Just wondered if you were doing a 'Lance' or were OK in this instance

[Lance]

Dunno. Just wondered if you were doing a 'Lance' or were OK in this instance

still on just the 2.
Hey I give my advice freely, and to coin a phrase 'you get what you pay for'.

IANAL/IANAA

[northernladuk]

still on just the 2.
Hey I give my advice freely, and to coin a phrase 'you get what you pay for'.

IANAL/IANAA

Damn straight. Just pullin' your leg.

[Sub]

Hello,
I am thinking to use an Estonian company because of Brexit in case it is turning bad and to have Euro in the bank instead of pound.

Thanks

If you just looking for EUR account outside UK - you'll be better off if you just open bank account in Estonia for your UK company:
Opening a current account for businesses registered abroad | SEB

Creating any artificial turnover is risky and will require consultations from both UK and EE accountants.