two limited companies ?

[tehcamel]

I'm an aussie looking at ex-patting for a year.. and i've been seeing a bit around abot umbrella companies and limited companies, as a way of increasing take-home pay.

However what I've noticed, if i interpret correctly, is, if i am the director of a limited company, and i'm performing services for a client that could be classed by HMRC as employment with that company, rather than self-employment with my limited company, then any dividends or personal income i take from the company gets classed as PAYE tax, resulting in higher taxes being paid.
am I on the right track so far ?

Alright.. so from there.. my wife will be on the trip with me.
What if I have LimitedCompanyA which I am a director of, and she has LimitedCompanyB which she is a director of.
LimitedcompanyA employs my wife and pays her minimal tax, to get her below the taxation limits, so she pays little or no tax on this.
LimitedCompanyB employs me, in the same scenario. of course, complying with all relevant payroll, superannuation tax, etc

Some from there, limitedcompanyB can pay dividends to the director (my wife) and limitedcompanyA can be dividends to me as director..
therefore, the work completed by limitedcompanyA which is paying dividends to me, is not work I've completed so can't really be classed as a direct employment, correct ?

or am I way off track here ?
what if we nest limited companies as directors or shareholders of other limited companies ?
(and sure, I get we take a hit on paying all the company fees....obviously financial due diligence would have to be done)

[malvolio]

I think you need to read the First TImer guides on this site, www.pcg.org.uk, then you might understand just how wrong your understanding is!

BTW, the two company trick won't work. Our local taxmen are very good at spotting arrangements that make no business sense and tend to tax you like they didn't exist, if not actually prosecute you for evasion. So do the reading, then come back with some sensible questions.

And as an aside, the market here is in the pits, rates are down, work is bing offhsored at an increasing rate and we have the worst governement in living memory (our PM makes your Kevin look positively sane). Why the hell would any sane person want to leave Oz and come here?

[tehcamel]

thanks i'll review that stuff

[PhilAtBFCA]

Limited Companies

tehcamel,

There are a variety of ways you could minimise your tax quite legitimately without creating structures that are potentially seen as artificial.

There are many other things to consider too, like how long you may contract for, where you may go after the UK , whether you really want to run a business whilst being in the UK etc...

You could start your tax planning by looking at this link which gives you a spreadsheet to plan with and a video explanation. That way you can make a clear choice about if Limited Company is a good route for you.

Phil

[xoggoth]

Indeed, there is such a thing as linked (linked isn't the official term which I have forgotten) companies. Any run by same persons or related persons can be treated as one for tax purposes.

[singhr]

Mate, please don't come over here and try to rip off our tax system. You will be standing on the shoulders of generations of citizens and dead servicemen who have worked and sacrificed to get this country where it is. Come over, work hard/play hard and make some new friends but please behave in the same way you would expect us to do in your country.