Overseas Contracting?

[OnAWhim]

Hello,

My first post and a rather complicated one!

My wife is in the process of negotiating herself a contract in a Middle-Eastern country, this would be for around 6 months and would hopefully be for a few hundred thousand pounds

However I am not happy with they prospect of a 50% tax bill Just wondering what the options are to try and reduce this to a more sensible level!

My initial reaction would be to go for a limited company with my wife and I as directors and employees. She would be working in the foreign country whilst I would be her secretary/PA etc working here in the UK. We would pay ouselves a reasonable salay.

This would allow us to claim for flights as business expenses. How easy would it be arrange a "Per diem" for subsistence expenses whilst she is living and working abroad and what limits are allowed! I remember when I was working for a normal Uk company around 10 years ago we were give something like £100 per day tax free to cover all living expenses whilst abroad!!!

One added "wrinkle" is she was born in the foreign country but currently only has a UK passport.


Regards

[Boo]

However I am not happy with they prospect of a 50% tax bill Just wondering what the options are to try and reduce this to a more sensible level!

Well, one alternative is to earn all the money abroad, keep it in a foreign bank account, and say nowt to Hector. Of course this is illegal, but realistically HMRC would never find out : the chance of them asking all the foreign banks in the world to disclose whether you have an account with them are vanishingly small (unless you do something majorly evil) so how would they ever know ?

Not condoning tax evasion here, just pointing out that it's pretty unlikely to be discovered.

Boo

[northernladuk]

Per diem is a permie thing. You can only claim expenses wholly and exclusively for business purposes. I am sure there is some way around this but it won't count towards your tax bill as a straight expense. On of our accounting types maybe point out a legal method for this...

[OnAWhim]

Well, one alternative is to earn all the money abroad, keep it in a foreign bank account, and say nowt to Hector. Of course this is illegal, but realistically HMRC would never find out : the chance of them asking all the foreign banks in the world to disclose whether you have an account with them are vanishingly small (unless you do something majorly evil) so how would they ever know ?

Not condoning tax evasion here, just pointing out that it's pretty unlikely to be discovered.

Boo

Crossed my mind but if the wife gets the project we are hoping to pay off the mortgage so we need to bring the money into this country. Just need to work out how to do this legally without a horrible tax liability.

[OnAWhim]

Per diem is a permie thing. You can only claim expenses wholly and exclusively for business purposes. I am sure there is some way around this but it won't count towards your tax bill as a straight expense. On of our accounting types maybe point out a legal method for this...

Ok, that's why I was wondering about setting up the limited company. Then we would be both permanent employees of that company (wouldn't we?). I was hoping that we could pay ourselves say £32000 each, take some via a per diem and maybe the rest as dividends?

[SueEllen]

Ok, that's why I was wondering about setting up the limited company. Then we would be both permanent employees of that company (wouldn't we?). I was hoping that we could pay ourselves say £32000 each, take some via a per diem and maybe the rest as dividends?

£32,000 for a PA/Secretary for someone working in another country is going to arouse suspicion with HMRC.

[ASB]

Look on the HMRC website for ScaleRates. Any employer can pay scale rates whilst employees are abroad. There may be some for wherever she is going.