Question for non-doms

[beaker]

Is there a legal way to get your money paid offshore while contracting in the UK therefore paying no tax?

I'm at a stage where I could probably live off my savings for a year so I dont really need to get paid to live...

[NotAllThere]

Taxation across borders is very unclear. My understanding is, that if you're not in the UK long enough to become resident for tax purposes, then you personally won't be liable for tax.

If your company is in the UK, then you'll pay corp tax if you declare dividends, but won't pay any tax or NI on your salary. Of course, if you have enough income to pay tax in the UK, you won't get the tax credits on the dividends.

If you company is not UK based, then is liable for tax on any profits it makes by virtue of you working in the UK. But you may have difficulty getting the agency to pay into your company account. Because, I think, if you don't pay that tax, they'll be liable for it.

I Am Not An International Tax Accountant or Lawyer.

[tim123]

Taxation across borders is very unclear. My understanding is, that if you're not in the UK long enough to become resident for tax purposes, then you personally won't be liable for tax.

Your understanding is wrong.

Liability for tax on earnings from work whilst physically present in the UK starts on day 1, unless the work in the UK is incidental to your normal job elsewhere (I.e you are in the UK to attend attend a meeting not to do your normal job).

International entertainment and sports star have to pay tax on income received from performing their art in the UK and the IR have a department specifically for making sure that this money is declared and that the tax is paid. This rule theoretically applies to everybody.

Of course, the same departrment is not going to be interested in Johnny the maintence engineer who comes to the UK for one day to fix a bit of kit that his company make, and which can only be fixed by him. But UK tax is actually due on one day of Johnny's normal income for this visit (subject to double taxation relief, of course).

So, legitimately avoiding UK tax on money earnt in the UK requires that the funds are converted into a form that has not been received for doing one's normal job (footballers do this by receiving some of their income as payment for 'image' rights, but I doubt a businessman could claim this).

Oh and finally, other countries have the same rules too. This idea of charging someone tax on one day's earnings is not unique to the UK, it's a perfectly usual thing for a country to do.

HTH

tim

[max]

Is there a legal way to get your money paid offshore while contracting in the UK therefore paying no tax?

I'm at a stage where I could probably live off my savings for a year so I dont really need to get paid to live...

You could move your saving offshore. For 2007-2008, you'd pay no tax as you'd be non-dom, then in april 2008 have your offshore bank change the frequency of payments such that the first payment is after you leave the uk....so no tax to pay. Maybe paid annually or longer.

You would not live of your saving..but live off your uk taxed earnings.

[NotAllThere]

No. We had people domiciled and resident in Switzerland, who were weekly/bi-weekly commuting to a 6 month project in the UK. They were not liable for UK tax on their salaries. Multinational company advised by international taxation experts.

[beaker]

You could move your saving offshore. For 2007-2008, you'd pay no tax as you'd be non-dom, then in april 2008 have your offshore bank change the frequency of payments such that the first payment is after you leave the uk....so no tax to pay. Maybe paid annually or longer.

You would not live of your saving..but live off your uk taxed earnings.

Thanks for the replies. I already send all my money offshore to invest

I did think there was a principal in UK tax law that tax was due on earnings made in the UK. So maybe there's no easy way do what I want, unless I work for an overseas company and I'm only in the country for a short period of time (which I'm not).

[tim123]

No. We had people domiciled and resident in Switzerland, who were weekly/bi-weekly commuting to a 6 month project in the UK. They were not liable for UK tax on their salaries. Multinational company advised by international taxation experts.

Yes sorry, you are right, there are exceptions for this type of transfer, because HMRC accept that the employee is being taxed at source in the home country.

There wont be an exception for little on man band companies

tim