If you work through your offshore company, then that company is liable to pay taxes on any profit it makes in the UK. All my company income, after expenses, is taken out as salary. Effectively, my company profit each year is as near to zero as makes no difference. So, I don't see how any tax can be due to be paid to the UK on that score.
For personal taxation, income arising from working in the UK is subject to UK tax (though not NI as observed earlier). What's to stop my employer (i.e. my offshoreltdco) paying me a much lower salary when I'm in the UK than when I'm back offshore? Perhaps if I do a four month gig, then HMRC will say that 1/3 of my annual salary for that year is subject to UK tax, subject to double taxation agreements? But what if I pay myself a base salary with a bonus according to my charge out rate. And different clients often pay different rates!
What does income arising mean, and how do HMRC work out which income arose where?
- 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!
Collapse
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.
Logging in...
Previously on "Best way for short term contract when living abroad"
Collapse
-
It will be so no problems there!!
Wonder if I'll be able to claim travel expenses to the UK
Leave a comment:
-
Originally posted by expat View Post1. ALL income derived from work in the UK is liable to UK tax, whether you are in the UK tax system or not.
2. If you are "in the UK tax system" (due to being in the UK for >183 days in one year, or an average of > 91 days over 4 years), then all income from anywhere is potentially liable to UK tax, subject to double-taxation elimination treaties.
3. Don't confuse #1 and #2. You might well get away with it, but these are the rules. If you earn the money from UK work, it is liable to UK tax, no matter where you are tax-resident or how little time you spend in the UK.
Leave a comment:
-
I certainly wasn't going to try to get away with not paying tax!!
Thanks for the clarification on point 1, very useful.
Leave a comment:
-
Originally posted by richclever View PostIt's just a couple of weeks and I believe you need to be in the UK for 180 days or so to be in the UK system for tax.
2. If you are "in the UK tax system" (due to being in the UK for >183 days in one year, or an average of > 91 days over 4 years), then all income from anywhere is potentially liable to UK tax, subject to double-taxation elimination treaties.
3. Don't confuse #1 and #2. You might well get away with it, but these are the rules. If you earn the money from UK work, it is liable to UK tax, no matter where you are tax-resident or how little time you spend in the UK.Last edited by expat; 12 December 2007, 13:19.
Leave a comment:
-
It's just a couple of weeks and I believe you need to be in the UK for 180 days or so to be in the UK system for tax.
I did mention about invoicing from m y French business but was told that it would have to be a UK Ltd company or Umbrella.
Leave a comment:
-
I recently did a 4 month contract in London, I am a non-resident and the contract didn't take me over the max number of days in the UK. I invoiced from my overseas company.
So it depends on if you intend on staying longer than the max day.
HTH
Leave a comment:
-
Thanks Expat, I was wondering about that actually.
So, it looks like it's just the NI that I need to worry about then. Definitely don't want to have to pay twice for that!!
If I get some longr contracts then I think I'll go down the Ltd company as I'm planning to relocate back to the Uk anyway. the Umbrella seems the logical one for this gig though.
Leave a comment:
-
Originally posted by richclever View PostHi,
Just had a call possibly offering me a couple of weeks work.
As I live in france and have a French company I was told that I would either need to set up a Ltd company in the Uk or work as under an Umbrella company in the UK. For ease of things as it's just a short term contract the Umbrella company seems the best model.
however, obviously I am under French taxation so have to pay income tax here not in the UK. Does anyone know how that would work? I have an NI number in the Uk as I'm British but don't know how best to approach things.
Obviously I'll also ask around back here to see what the consensus is.
thanks,
OTOH you should not need to pay NIC in the UK, provided that you are French tax-resident and armed with E101/E128/whatever it is these days. Important because that is "not a tax" so the French will not gve you a credit for it.
Ask a good umbrella. I never had to do this but when I thought I might, I called an umbrella spoken well of hereabouts, and they said they would have no trouble with it.
Hints:
1. phone the International Offices of the tax authorities of both countries.
2. try to make sure that both countries agree on what type of income it is. If one thinks it's salary and the other thinks it's dividend, you may get taxed in both. Using an umbrella should fix this.Last edited by expat; 12 December 2007, 10:47.
Leave a comment:
-
Best way for short term contract when living abroad
Hi,
Just had a call possibly offering me a couple of weeks work.
As I live in france and have a French company I was told that I would either need to set up a Ltd company in the Uk or work as under an Umbrella company in the UK. For ease of things as it's just a short term contract the Umbrella company seems the best model.
however, obviously I am under French taxation so have to pay income tax here not in the UK. Does anyone know how that would work? I have an NI number in the Uk as I'm British but don't know how best to approach things.
Obviously I'll also ask around back here to see what the consensus is.
thanks,Tags: None
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Leave a comment: