• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:

  • You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
  • You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
  • If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.

Previously on "Family member as additional director"

Collapse

  • NowPermOutsideUK
    replied
    Originally posted by ContractorPL View Post
    No necessarily. DTA between the UK and Poland:

    except as provided in sub-paragraph (a) of this paragraph, may also be
    taxed in the Contracting State of which the company paying the dividends
    is a resident and according to the laws of that State, but if the beneficial
    owner of the dividends is a resident of the other Contracting State, the tax
    so charged shall not exceed 10 per cent of the gross amount of the
    dividends.


    And at the moment I really don't know how my dividends should be taxed...is it just tax in my resident country? Or 10% for HMRC also...
    If you are out of Uk non resident there is no dividend tax to pay to hmrc. I think but I’m not sure about the five year rule for divis. It definitely applies to proprietary cgt (the five year rule). However as I will be out of Uk for five years it does not make a difference to me

    You need to pay whatever your local income tax is to the country you are in yes

    Leave a comment:


  • ContractorPL
    replied
    Originally posted by NowPermOutsideUK View Post
    Also worth pointing out that dividends from your uk ltd IS TAX FREE if non uk tax resident meaning if you move away rom UK you can declare a dividend with no further UK tax to pay - Of course local tax might charge something but the point is that the Uk does not

    That means as above name "profit - 19% corp tax" is total payable which makes UK low tax place in such an environment
    No necessarily. DTA between the UK and Poland:

    except as provided in sub-paragraph (a) of this paragraph, may also be
    taxed in the Contracting State of which the company paying the dividends
    is a resident and according to the laws of that State, but if the beneficial
    owner of the dividends is a resident of the other Contracting State, the tax
    so charged shall not exceed 10 per cent of the gross amount of the
    dividends.


    And at the moment I really don't know how my dividends should be taxed...is it just tax in my resident country? Or 10% for HMRC also...

    Leave a comment:


  • zerosum
    replied
    Originally posted by NowPermOutsideUK View Post
    Also worth pointing out that dividends from your uk ltd IS TAX FREE if non uk tax resident meaning if you move away rom UK you can declare a dividend with no further UK tax to pay - Of course local tax might charge something but the point is that the Uk does not

    That means as above name "profit - 19% corp tax" is total payable which makes UK low tax place in such an environment
    As long as you don’t try and move back within 5 UK tax years, yes.

    Leave a comment:


  • NowPermOutsideUK
    replied
    Also worth pointing out that dividends from your uk ltd IS TAX FREE if non uk tax resident meaning if you move away rom UK you can declare a dividend with no further UK tax to pay - Of course local tax might charge something but the point is that the Uk does not

    That means as above name "profit - 19% corp tax" is total payable which makes UK low tax place in such an environment
    Last edited by NowPermOutsideUK; 20 November 2020, 15:18.

    Leave a comment:


  • win10
    replied
    Originally posted by eek View Post
    My concern would be a fundamental one - if you are expecting to get work from agents how will that work come April when a lot of things will be inside IR35?
    My current client's stance before April 2020 was: No UK LTDs permitted if any worker is UK tax resident.
    If the worker is not UK tax resident (lives outside UK) then UK LTD will be permitted (as well as any other EU LTD) and = b2b engagement.

    In contrast any worker employed by their EU LTD, but living in UK will not be permitted (and the EU LTD as well).

    This came from their legal department so I consider it solid.

    RE: director's location: the rules might be very complex, but if the end result is that the proper amount of tax is paid to the HMRC it is highly unlikely HMRC will investigate. With someone living out of UK the most simple case will be total turnover = profit @ 19% tax.
    Last edited by win10; 19 November 2020, 15:27.

    Leave a comment:


  • WTFH
    replied
    Originally posted by zerosum View Post
    Correct. Or an EU citizen in the UK, as the whole point is the reciprocity of the arrangement.

    Correct. It's about where you are resident. No freedom of movement between the two.

    Leave a comment:


  • zerosum
    replied
    Originally posted by WTFH View Post
    The WA only applies if you are resident in an EU country by 31st December 2020, i.e. in 42 days.
    If you're not, then the WA doesn't apply.
    Correct. Or an EU citizen in the UK, as the whole point is the reciprocity of the arrangement.

    Leave a comment:


  • WTFH
    replied
    Originally posted by zerosum View Post
    Nope. If you're referring to the internal market bill it doesn't affect citizens' rights.

    Citizens' rights feel reasonably secure on the basis that it would be mutually assured destruction.

    The WA only applies if you are resident in an EU country by 31st December 2020, i.e. in 42 days.
    If you're not, then the WA doesn't apply.

    Leave a comment:


  • zerosum
    replied
    Originally posted by WordIsBond View Post
    2. Competence. The new director might mess things up on accounts, reporting, etc., and you end up with lots of problems.
    Presumably this risk can be mitigated by having them do the bare minimum possible, and the accountant taking most of the slack?

    Leave a comment:


  • zerosum
    replied
    Originally posted by Lance View Post


    you are joking? Aren't you?
    Nope. If you're referring to the internal market bill it doesn't affect citizens' rights.

    Citizens' rights feel reasonably secure on the basis that it would be mutually assured destruction.
    Last edited by zerosum; 19 November 2020, 10:43.

    Leave a comment:


  • Lance
    replied
    Originally posted by zerosum View Post
    It's a reasonable concern.

    I'd say it's a trade-off. For those roles which are deemed outside IR35, the fact that I am abroad bolsters the case.

    It will be easier to work and trade in Europe (i.e. with an AbroadCo). Over the years I'd say my contracts were about 30% from this quarter so it might be necessary to expand that.

    Overall, there seems more optionality in going this route and being protected by the Withdrawal Agreement and then changing my mind if necessary and moving back, compared with the many hoops one has to jump through to get residency and a work permit as a third country national (verging on the impossible in many cases). Brexit incinerated the good options, it's a choice of which kind of sh*t to eat at this point.


    you are joking? Aren't you?

    Leave a comment:


  • zerosum
    replied
    Originally posted by eek View Post
    My concern would be a fundamental one - if you are expecting to get work from agents how will that work come April when a lot of things will be inside IR35?
    It's a reasonable concern.

    I'd say it's a trade-off. For those roles which are deemed outside IR35, the fact that I am abroad bolsters the case.

    It will be easier to work and trade in Europe (i.e. with an AbroadCo). Over the years I'd say my contracts were about 30% from this quarter so it might be necessary to expand that.

    Overall, there seems more optionality in going this route and being protected by the Withdrawal Agreement and then changing my mind if necessary and moving back, compared with the many hoops one has to jump through to get residency and a work permit as a third country national (verging on the impossible in many cases). Brexit incinerated the good options, it's a choice of which kind of sh*t to eat at this point.

    Leave a comment:


  • eek
    replied
    My concern would be a fundamental one - if you are expecting to get work from agents how will that work come April when a lot of things will be inside IR35?

    Leave a comment:


  • zerosum
    replied
    Originally posted by BlueSharp View Post
    Their is a who sub-form for people who took international tax specialist advise might be worth having a look:

    https://www.contractoruk.com/forums/...eme-enquiries/
    Doesn't this rather ignore the fact that the effect of the advice is to pay HMRC more tax than would otherwise be the case? Issues are more likely to come from abroad if anything.

    Leave a comment:


  • BlueSharp
    replied
    Originally posted by zerosum View Post
    Nice try, but again, this is paid advice from an international tax specialist with experience of winning cases.

    He advised that I should have an additional director in the UK, and ensure that all management and control occurs in the UK, including flying in for board meetings, and that recent cases have been won on this.

    He did not advise on all the ins and outs and implications of hiring such directors.

    Back at you.
    Their is a who sub-form for people who took international tax specialist advise might be worth having a look:

    https://www.contractoruk.com/forums/...eme-enquiries/

    Leave a comment:

Working...
X