Working remotely for UK based Ltd company

[jamesbrown]

That might take care of the personal tax issues, but still leaves the sticky 'company residency' issue, which might be hard to get around.

I know this is an old topic/post by the OP, but....

Not necessarily. There's a very complex mechanism to avoid deferral of income through a foreign controlled corporation, known as subpart F. Even filing the relevant portion of the tax return can run into several thousand dollars.

[NotAllThere]

Did you ever get an answer on this Carrie?

What matters most is where you are resident and where you are physically performing the work.
Having a ltd co in between you and the client only affects the ltd co - not you.
The location of the client is largely irrelevant.

[Trim]

Apologies for bringing up an old post, but I have a very similar situation arising for myself.

I am expecting to relocate to Dubai in a couple of months and my company would like to keep me, however have advised me to become a contractor rather than a standard PAYE.

I think I've gathered from this thread that you are only liable to pay tax based on the country you are reisident, so in my case this would be Dubai (which is tax free). In this instance, is there really a need for me to setup a LTD company? if so, doesn't this mean that the LTD company would end up paying tax as it's trading with the UK client (multinational company, holds a UK arm)?

Completely new to this idea of contracting, it scares the jeepers out of me to be honest. I had hoped that being in Dubai meant I didn't need to pay any taxes

[jamesbrown]

Apologies for bringing up an old post, but I have a very similar situation arising for myself.

I am expecting to relocate to Dubai in a couple of months and my company would like to keep me, however have advised me to become a contractor rather than a standard PAYE.

I think I've gathered from this thread that you are only liable to pay tax based on the country you are reisident, so in my case this would be Dubai (which is tax free). In this instance, is there really a need for me to setup a LTD company? if so, doesn't this mean that the LTD company would end up paying tax as it's trading with the UK client (multinational company, holds a UK arm)?

Completely new to this idea of contracting, it scares the jeepers out of me to be honest. I had hoped that being in Dubai meant I didn't need to pay any taxes

You need professional advice. For one, your company is primarily looking out for themselves here.

However, in short, if you have a UK resident company (your intentions on this are unclear) you will pay corporation tax in the UK on worldwide profits. Likewise, if you are personally UK resident, you will pay personal taxes in the UK on your worldwide income. And it isn't nearly as simple as you'd imagine to become non-UK resident for tax purposes on leaving the UK temporarily. You essentially have to cut most or all ties in the UK and be planning to spend a considerable length of time employed abroad (as in, more than a year). If you're planning to move to Dubai "permanently", you should either look to continue as an employee of your company in Dubai or set-up a company in Dubai and invoice them (indeed, why on earth would you have a UK company if you are "relocating" to Dubai?). If this is some sort of attempted tax dodge - and it sort of smells that way without further info. - think again - you'd better be very clear about your residency status and the latest rules (since April this year) if you're planning to become non-UK resident for tax purposes.

[Trim]

You need professional advice. For one, your company is primarily looking out for themselves here.

However, in short, if you have a UK resident company (your intentions on this are unclear) you will pay corporation tax in the UK on worldwide profits. Likewise, if you are personally UK resident, you will pay personal taxes in the UK on your worldwide income. And it isn't nearly as simple as you'd imagine to become non-UK resident for tax purposes on leaving the UK temporarily. You essentially have to cut most or all ties in the UK and be planning to spend a considerable length of time employed abroad (as in, more than a year). If you're planning to move to Dubai "permanently", you should either look to continue as an employee of your company in Dubai or set-up a company in Dubai and invoice them (indeed, why on earth would you have a UK company if you are "relocating" to Dubai?). If this is some sort of attempted tax dodge - and it sort of smells that way without further info. - think again - you'd better be very clear about your residency status and the latest rules (since April this year) if you're planning to become non-UK resident for tax purposes.

Thanks James, although your nose smells wrongly. My partner and I are leaving the UK, with a 2-3 year plan, and intend to only return after that plan is completed (or possibly longer than 2-3 years) I guess it is a tax dodge in that I would like to be in a position of not paying any tax since I am not going to use anything the UK has to offer, but will still work for a large international company. They hold a presence in UAE and maybe I should be looking to do things locally via them while doing the work for the UK arm?

Being a non financial/tax person, it seems silly to me that I should be paying tax to the country when I am not there, yet ironically the same country would allow Billy from elsewhere in the world, bring his grandma to the UK and allow them free usage of our NHS without having paid a penny in tax.

[jamesbrown]

Thanks James, although your nose smells wrongly. My partner and I are leaving the UK, with a 2-3 year plan, and intend to only return after that plan is completed (or possibly longer than 2-3 years) I guess it is a tax dodge in that I would like to be in a position of not paying any tax since I am not going to use anything the UK has to offer, but will still work for a large international company. They hold a presence in UAE and maybe I should be looking to do things locally via them while doing the work for the UK arm?

Being a non financial/tax person, it seems silly to me that I should be paying tax to the country when I am not there, yet ironically the same country would allow Billy from elsewhere in the world, bring his grandma to the UK and allow them free usage of our NHS without having paid a penny in tax.

Fair enough . If you're moving abroad for the long-term, as described, you'll want to properly cut your ties with the UK. It's important for residency status (take a look at the latest rules: Residence and Domicile - can expats still rely on non-resident status?), but beyond that it's just sensible; you really don't want the enormous headache and expense of cross-border personal or corporate taxation to deal with. Set yourself up properly in the UAE, either as an employee of your current multinational (i.e. through their UAE payroll) or as a contractor through your own company based in the UAE, invoicing the UK-arm of the multi-national if necessary. Best of luck. And remember that your company is, more than likely, looking out for themselves in suggesting a particular arrangement, so look for professional advice if you're unclear about any specifics.