UK Company, Non resident director, No Salary

[frediokl]

I used to contract in the UK but 6 years ago gave up the rat race, left the UK and moved to the Algarve.

I am current registered self employed in Portugal running a website. Not my initial plan but i sort of fell into it.

The site only makes about €8000 a year but have to pay over €180/month in portuguese social security payment. Even if i make no money i have to pay it!

Being an ex contractor so hating NI I have no intention of having a Portuguese pension or claiming unemployment benefit so I was wondering if setting up a uk company would be a solution.

What is the current stance of setting up a uk company to run the site but taking no salary as a non resident director. All drawings would be dividends. The site is uk hosted and is aimed at uk residents, so a uk company would be its natural home.

Another reason for a UK company is the VAT threshold. I dont really want to be registered and in Portugal its a stupidly low €10000. Also only 50% of income on dividends is taxable in Portugal.

Does anyone know of any reason why I could not be an unpaid director of a uk company whilst resident in Portugal, even though I would be working for the company.

[SueEllen]

Does anyone know of any reason why I could not be an unpaid director of a uk company whilst resident in Portugal, even though I would be working for the company.

Don't know how old you are but surely you want to pay social taxes or have your contribution to them count towards a state pension when you are infirm?

Even though you paid no NI in the UK there is a loophole that means that your actually have made contributions that count.

BTW have you checked Portuguese law about the residency of a company due to where it's directors are located? UK law doesn't care but lots of EU countries do.

[frediokl]

Hi SueEllen,

I have paid UK NI in the past so will have a pension from the UK. Grrr IR35!!! I just object to having to pay a fixed amount a month in Portugal regardless of how little I make, for benefits I am never going to take! Just looking at the options before I meet my accountant here. I'll ask him about your company residency point, thanks.

[SueEllen]

I have paid UK NI in the past so will have a pension from the UK. Grrr IR35!!!

Check with the pension service (free) that you have paid enough years. They lowered the number of years you need to make count a couple of years ago.

[frediokl]

Already done that! One of my options is to pay voluntary contributions and then ask the Portuguese for an exemption because i am paying in the uk but there is no guarantee the will accept that, especially class 4.

[SueEllen]

BTW when you get advice from your accountant can you post the generic advice given up here?

There will be someone for whom the information will be useful.

[configman]

Check with the pension service (free) that you have paid enough years. They lowered the number of years you need to make count a couple of years ago.

30 years for full single pension.