Contracting in the UK via HongKong registered company.

[prozak]

Hi BlasterBates, I'm jumping on this old thread. I was actually trying to find out why - while doing some contracting job in UK - we can't run under a Hong Kong based Ltd company? Is this by law?

Thks in advance!
Vince

Foreign companies are free to trade in the UK.

However there are VAT implications around the place of supply - you will have to register for UK / EU VAT

https://www.gov.uk/government/public...ly-of-services

[BlasterBates]

Hi BlasterBates, I'm jumping on this old thread. I was actually trying to find out why - while doing some contracting job in UK - we can't run under a Hong Kong based Ltd company? Is this by law?

Thks in advance!
Vince

You need to see an accountant. It's a complex area but generally if you do business in the UK or anywhere you need to be registered there, statisfy the local regulations and submit tax returns. Not saying you definitely can't use your HK company but you need to check all the regulations regarding this, i.e. you would probably have to register somewhere.

[Vincekun]

You can't run a HongKong company to do business in the UK, as the work will be done in the UK.

You need to setup a UK co.

Hi BlasterBates, I'm jumping on this old thread. I was actually trying to find out why - while doing some contracting job in UK - we can't run under a Hong Kong based Ltd company? Is this by law?

Thks in advance!
Vince

[Greg@CapitalCity]

1. Since I am contracting in the UK, are there any limitations in "maximum days of working/staying in the UK". ( as I am paid out of HK)

If you are in the UK for 183 days or more in a tax year, you will be a tax resident - there are no exceptions to this rule. If you stay for less that than then there are numerous other factors to consider - take a look at the guidance Clare gave you. For your company, look at the double taxation agreement between HK and the UK, to help determine if your company will be considered UK tax resident. You will need some specialist advice in this area as you will need to make sure you get it right.

2. I have to put VAT in my invoices, this is going to be HongKong VAT, correct me if I am wrong.

I don't believe there is any VAT in HK. You may need to register for UK VAT - again, chat to your tax adviser about this.

3. Am I liable to pay any tax in the UK?

This all depends on the residency issues above. If either you, or your company, are considered tax resident in the UK, then you will be liable for tax in the UK.

[BlasterBates]

You can't run a HongKong company to do business in the UK, as the work will be done in the UK.

You need to setup a UK co.

You will be liable for tax on your employment income, and probably your dividends.

It is possible to be tax resident in multiple countries though usually one country will be viewed as your primary residency. If you stay more than 6 months in the UK they will probably view you as primarily resident there.

Working round the world will be complicated tax wise and will probably entail you registering in all the countries you work in.

[Clare@InTouch]

Your company would likely be liable to UK CT if the management of the company is carried out here, which is effectively would be.

You may need to be VAT registered in the UK.

If you're here for 8 months each year then you may well be tax resident here and liable for UK personal tax on your worldwide income. You'd get credit for any tax paid on HK income, but you'll end up paying the higher rate that applies between the two countries.

Very simply, you likely won't be any better off than if you'd just started a UK limited company if you're spending that much time in the UK.

You need to do some research, and you can start here for personal tax: http://www.hmrc.gov.uk/cnr/hmrc6.pdf

[northernladuk]

I would have thought if you were so adept at investigating the tax situation of other countries to try and use them to your advantage you would be able to find out what the situation is in the UK. Starting up a dodgy scheme to avoid paying tax without the ability to understand your situation seems like a bit of a loser to start with.

I believe you are going to be very disappointed with the answers you get to this question which raises a further question was it worth it? It is very nice having a HK country but not much use when people won't contract to it.

Also as part of these indepth investigations into complicated and dubious tax dodges I would have thought you might have been able to put this in something like the right forum.

[Traveller1]

Hi all,

I have a question regarding contracting in the UK and be based in HongKong.

I am a Dutch resident at the moment, but there is always a time for leaving.
So I am "signing" out of the The Netherlands, therefore I am not liable to pay any Dutch taxes anymore.

I am planning to open a engineering company in HongKong, because HongKong has a very interesting tax regime.
All the money you earn outside HK, is considered being offshore. Therefore you do not pay any tax at all in HK.

A company in the UK offered me a position.
I will take this position as a (sub) contractor. But again the company is registered in HK.

I will be staying in the UK between 6 and 8 months per year , as the company will be sending me around the world to perform so jobs at customers sites.

I do have some questions about that,

1. Since I am contracting in the UK, are there any limitations in "maximum days of working/staying in the UK". ( as I am paid out of HK)
2. I have to put VAT in my invoices, this is going to be HongKong VAT, correct me if I am wrong.
3. Am I liable to pay any tax in the UK?
4. Any suggestion for a "liablility insurance" which covers semiconductior environment jobs.

I am nog familiar with the UK tax system at all, so I hope you can give me some answers! Much appreciated!


regards Peter