Reply to: Can a non-IR35 non-domiciled contractor to a UK client bill the client from an offsho

[northernladuk]

Yabouti

[NotAllThere]

rattlenroll.

[GJABS]

If that were the case everyone could set up offshore companies and then fly over 3 times a year to do the paper work.It won't work.

True, it might not be sufficient to deal with HMRC.

[BR14]

Yerh MahanI?

nah, - dedripsoff

[vetran]

My first name is Sheikh. How do I do it?

Yerh MahanI?

[BlasterBates]

Who owns and runs the (from a UK perspective) offshore company? If it is you, then it is likely that the HMRC will deem the company to be a UK domiciled company despite its overseas origins, because you are running it while being physically located in the UK - the company's management is in the UK.

To get around this you will have to physically leave the UK every time you want to get the company to do anything, such as pay a salary, pay tax, complete accounts, etc.

If that were the case everyone could set up offshore companies and then fly over 3 times a year to do the paper work.It won't work.

If you are doing work in the UK, your company is obliged to register in the UK. It will be considered to have premises in the UK even though it is the office of the client. The only exception is if you are working for up to 6 months for a non-UK company on some project and you are invoicing the foreign company and they are not then invoicing the UK client directly for your services, i.e. acting as an intermediary.

[NotAllThere]

I'm quoting what a friend told me, who is a tax partner in one of the big 4 accountancy firms.

Well, either you didn't really understand what he was saying, he didn't understand what you were asking, or he's crap at his job.

Based on your previous form, I'm going for the first option.

Appeal to Authority

[Mordac]

My first name is Sheikh. How do I do it?

You need to offer the UK a favourable oil trading deal, and agree to equip your entire air force with UK supplied jets and weapons. They'll let you pay whatever tax you want to pay.

This advice is free, but if saves you a fortune, and you feel so inclined, I wouldn't say no to a new Lambo.

[GJABS]

Which can all be done in a single day once a month. No - that's not a way around it.

In a nutshell:

I'm quoting what a friend told me, who is a tax partner in one of the big 4 accountancy firms.

[NotAllThere]

To get around this you will have to physically leave the UK every time you want to get the company to do anything, such as pay a salary, pay tax, complete accounts, etc.

Which can all be done in a single day once a month. No - that's not a way around it.

In a nutshell:

Contracting for a UK company means that your foreign company will still be liable for UK corporation tax anyway (so no benefits to paying into an offshore bank account, the corp tax remains due), and what yourco pays you will have been earned in the UK, and so therefore UK tax is due, even if you are a non-dom. Even if your offshore company pays you into your offshore bank from its own offshore bank. Tax is due on where it is earned, not where the money is paid.

[meridian]

I’m not sure how you think you can be a non-dom if you live here.

That bit's actually quite easy, in the right circumstances.

Your domicile’s usually the country your father considered his permanent home when you were born.

[meridian]

I am a contractor to a UK client

You're already offshore, contracting (providing services) to a UK-based client through an offshore company? OK.

and am considering moving to live in the UK. My contracts are outside IR35 and in the UK I would be non-domiciled for tax purposes.

You may be. Your company would not be (no concept of domiciled/non-domiciled for companies, they can be resident or non-resident).

Could I legally have an offshore company bill the client and have payments made to an offshore account

Yes. And, according to your first sentence, you already do? There's nothing legally to stop offshore billing or payments, though agencies and UK-based companies engaging contractors do not tend to like it and will frequently refuse to deal with you unless both you and your company are based in the UK. But you've already said that you are a contractor to a UK client, so this is already happening, right?

then only pay UK income tax on that income which I remit to the UK?

No, you are mixing up personal and company income. You personally will (subject to non-dom rules) only pay UK income tax on income that you "remit", including anything you spend on credit cards, etc for living expenses. And you may also need to pay the annual charge. HMRC helpfully asks you to contact them to discuss your circumstances so that they can advise in more detail:

Tax on foreign income: 'Non-domiciled' residents - GOV.UK

Your company may pay full UK income tax on any income earned here, but the rules and requirements are complex and depend on management and control and which jurisdiction your company is established in. You should engage an accountant or tax lawyer.

Using an Offshore Company | Offshore Formations 24.7

[chopper]

I’m not sure how you think you can be a non-dom if you live here.

You prove that you're only in the UK temporarily and intend to return 'home' (i.e. you retain your main residence overseas). Non-doms who have been here long enough have to pay a huge fee to uk.gov for the non-dom privilege, £30k a year if you have been here for 7 of the last 9 years.

However, it has no benefits in this scenario, because it is about not paying tax on foreign earnings. Contracting for a UK company means that your foreign company will still be liable for UK corporation tax anyway (so no benefits to paying into an offshore bank account, the corp tax remains due), and what yourco pays you will have been earned in the UK, and so therefore UK tax is due, even if you are a non-dom. Even if your offshore company pays you into your offshore bank from its own offshore bank. Tax is due on where it is earned, not where the money is paid.

[pscont]

And good luck getting non-dom status, unless your first name is "Sheikh" I don't rate your chances.

My first name is Sheikh. How do I do it?

[Mordac]

I am a contractor to a UK client and am considering moving to live in the UK. My contracts are outside IR35 and in the UK I would be non-domiciled for tax purposes. Could I legally have an offshore company bill the client and have payments made to an offshore account then only pay UK income tax on that income which I remit to the UK?

1: No UK clients are going to agree to that arrangement, because there will be consequences for them when HMRC find out what's going on.
2: When you come to declare "foreign income" and HMRC put two and two together (which they will, surprisingly quickly) the consequences for you will be far worse. I'm talking asbestos underpants kind of worse.

And good luck getting non-dom status, unless your first name is "Sheikh" I don't rate your chances. Do report back though, we could all do with cheering up...