Working remotely overseas through UK limited company for UK client

[contractor82]

Hi all

I am intending to relocate abroad for the foreseeable future, and my client is happy for me to continue contracting remotely.
I have a decent amount of retained earnings in the ltd company from previous years, and normally I'd take a chunk of it as dividends each tax year (paying dividend tax as normal).

Assuming I will not be UK tax resident during 2019-2020, would I still need to pay dividend tax in the UK, or in my country of residence?
This was my impression, given that the profit will be earned by a UK company working with a UK client.

I also have the option of closing down the limited company and opening a new one overseas, but I don't want to fall foul of Targeted Anti Avoidance Rules.
CTM36305 - Company Taxation Manual - HMRC internal manual - GOV.UK
I presume this would apply even if the new company is not registered in the UK.
Ideally I wouldn't want to go for this option, as it may complicate things for the current client, and more so for potential new UK clients.

Now the obvious answer is to ask for specialist tax advice (which I may end up doing anyway), but if everyone here agrees that there is really nothing to be done except pay dividend tax as if I were still UK resident, then I might save myself the time and expense of looking up alternative options.

Thanks in advance!

[man]

I don't know the answer but have an interest in this sort of thing myself so I'm curious as to what you find out on this.

The only relevant thing I can tell you is that it's possible to be a tax resident in two countries at once, so you'll need to check the law of the country you're physically based in when doing the work, as well as the UK.

[contractor82]

I don't know the answer but have an interest in this sort of thing myself so I'm curious as to what you find out on this.

The only relevant thing I can tell you is that it's possible to be a tax resident in two countries at once, so you'll need to check the law of the country you're physically based in when doing the work, as well as the UK.

Yes, I know..
The country I will be living in has a double taxation agreement with the UK and lower overall tax rates, so I am hopeful that whatever tax I will have to pay will be, at a maximum, the same I would pay if I were to be living in the UK (whether or not I am tax resident in one country or both countries..)

[NotAllThere]

If your company is resident in the UK, it is liable for taxes in the UK. Assuming you're not planning to return to the UK, you will only be tax resident in your new home country.

It will be far simpler administratively and tax-wise to set up a new company in your new country.

I'm Swiss resident, and I've worked for UK companies remotely from my Swiss company. There's certainly little to worry about falling foul of TAAR. You're not in the UK anymore, so you're not under HMRC at all.

There are wrinkles to the above, and it depends exactly how far you cut your ties with the UK, but keeping your UK company to my mind is a bad idea.

[WordIsBond]

Wouldn't you have to pay UK corporation tax (if you keep a UK company), but NewCountry income tax on salaries and dividends? That seems unlikely to be tax efficient....

[NotAllThere]

Wouldn't you have to pay UK corporation tax (if you keep a UK company), but NewCountry income tax on salaries and dividends? That seems unlikely to be tax efficient....

That's my view. Some countries do not give tax credits on dividends, which might change things a little - but the UK seems to be heading that way!

[BlasterBates]

Wouldn't you have to pay UK corporation tax (if you keep a UK company), but NewCountry income tax on salaries and dividends? That seems unlikely to be tax efficient....

No you need to register a company in Switzerland. According to Double Taxation treaty companies that operate cross border need to register in all the countries they operate in and pay corporation tax on the proportion of earnings within each country in that country.

[Robinho]

I do this. But i have a remained a UK tax resident via not staying in any country long enough.

I recently enquired to HMRC about whether i'd have to pay tax on my director's salary from my UK company if i gained tax residency elsewhere (in a country that didn't charge tax on foreign income) and they said i would. Though i feel they might be talking tulipe on that.

I have been looking to offshore my company to HK even going as far to start a thread on CUK about it. The hope was that - fueled on by their egos and desperate need to be validated on the internet - the members of this forum would do all the thinking for me, but sadly it didn't happen. Though Old Greg was the butt of an amusing joke so that was a silver lining.

AFAIA you'd have to pay UK VAT and possibly Corporation tax. However i was thinking maybe you could get round the corp tax things by never generating a profit and just paying yourself a big salary, which again wouldn't be taxed so it wouldn't matter.

I think i decided to reconsider the idea in a year's time.

[simes]

The hope was that - fueled on by their egos and desperate need to be validated on the internet - the members of this forum would do all the thinking for me, but sadly it didn't happen.

I did laugh...

[WordIsBond]

No you need to register a company in Switzerland. According to Double Taxation treaty companies that operate cross border need to register in all the countries they operate in and pay corporation tax on the proportion of earnings within each country in that country.

I hadn't noticed that OP said he was in Switzerland.