UK Taxes

[retired_member33]

Will be moving to the UK in a couple of months and trying to get a bit more information on the UK tax system.

I currently have a company setup in Holland which I am planning to close down due to the fact that I am mainly involved in affiliate marketing for which I dont really need a VAT number and trying to explore the different options in the UK.

Could someone explain me a bit more about the different legal options available such as Sole trader, Ltd company or trading as an individual and the different tax levels available?

I will most prob stay in the UK for about a year and then move on to another country when my gf finishes uni.

 

[retired_member33]

Anyone?

 

[Edwin]

You need to find a very good accountant.

If you set up a UK company, I believe (see my opening sentence - I am not an accountant!) that company will remain liable to UK tax forever, because the jurisdiction of the company is what determines the tax liability, not the location of a particular employee.

In other words, better to pay for some expert advice now than accidentally set up a situation that could be far more costly in the long run!

 

[aquanuke]

As Edwin said, an accountant will save you far more then they cost and you can just forget about it and go back to bed.

 

[accelerator]

When people start out working on their own, they can just register as a self employed sole trader. It's not worth forming a Ltd company until you reach a certain earnings level, and being taxed via the company becomes more efficient, but even then you don't have to.

Rgds

 

[retired_member33]

Thanks guys.

Level of earnings is 50k Sterling a year, I will be working alone and not employing any employees.

Perhaps I just shouldnt register as any sort of company considering that I will only be there for about a year and that I wont be involved in any large business transactions apart from the odd domain sale.

How are the tax levels for individuals in the UK? I am currently paying about 42% taxes on a large part of my earnings

 

[wb]

To be honest you'll find all this information on the HMRC website.

If you're only staying for about a year then it's probably going to be less hassle going self employed, but will be likely to cost you more. The best option will depend on your personal circumstances, but if you're going self employed then the details for the current financial year are below.

Income Tax
£7,475 = 0%
£0-£35,000 = 20%
£35,001-£150,000 = 40%

National Insurance
Class 2 = £2.50/week
Class 4 = 9% on profits between £7,225 and £42,475 + 2% on profits over that

---

So, on profits of £50k, this should be right...

Note: I've only done it very quickly. I haven't checked it. I'm not an accountant. I don't expect anyone to moan if something's incorrect.

Income Tax
-£0 tax (£7,425 tax free personal allowance for 2011/12)
-£7,000 tax (20% of £35,000)
-£3,010 tax (40% of £7,525)
= sub total tax £10,010

National Insurance
Class 2 = £130
Class 4 = £3172.50 (9% of £35,250) + £150.50 (2% of £7,525)
= sub total NI £3,323

Total tax + NI = £13,333 (average of 26.66% on the whole amount)

 

[jwm]

To be honest I would seek tax advice in Holland first as given your plans, your nationality and how you earn a living you will have a lot of flexibility for your tax planning and could probably make arrangement to minimise the tax you pay considerably.

For example, I presume your Dutch company currently owns your income earning websites? Will the shut down of the company result in the company paying tax on the disposal of the websites to you? If it does it might be easier to keep the Dutch company running and only send over the money you need to live on and pay tax on that.

The best thing to do would be to find a good tax planning accountant in Holland who specialises in offshore arrangements/expat issues. They will be able to tell you exactly what to do.

 

[redbird]

Keith at HRBS is very experienced at affiliate marketing (he also posts useful info on a4u). I'm sure he would answer any questions you may have.

There are also many useful guides on the site

Dave

 

[Edwin]

To be honest I would seek tax advice in Holland first as given your plans, your nationality and how you earn a living you will have a lot of flexibility for your tax planning and could probably make arrangement to minimise the tax you pay considerably.

Agreed. If you're only going to be in the UK for a year or less (spanning 2 tax years) you're better off getting things straight for the longer term rather than solving the issue once for the UK then trying to rearrange everything again in a year!

 

[retired_member33]

Thanks guys, yes I was basically looking for some general information, will be meeting up with other expats, chamber of commerce and an accountant specialized in expats over the coming weeks to get into the details of it.

Also looking to meet someone from the Dutch taxes but as I have a dispute with them ( which also involves me living abroad and making money) I want to wait a bit with doing that untill its settled.

Thanks all!

 

[retired_member33]

Keith at HRBS is very experienced at affiliate marketing (he also posts useful info on a4u). I'm sure he would answer any questions you may have.

There are also many useful guides on the site

Dave

Thanks!

 

[Frog]

Thanks guys, yes I was basically looking for some general information, will be meeting up with other expats, chamber of commerce and an accountant specialized in expats over the coming weeks to get into the details of it.

If anyone is considering meeting this madman, best be careful My girlfriend says if he appears again she's leaving me

 

[diablo]

Perhaps I just shouldnt register as any sort of company considering that I will only be there for about a year . . . (

It could be that you won't be liable for UK tax at all if you are not moving here permanently and don't work here for at least one whole tax year.

In those circumstances, you could continue to pay tax in Holland, as you are now doing, while living in the UK.

See what your accountant says because it is a lot of hassle moving between tax jurisdictions for short periods of time.

 

[retired_member33]

If anyone is considering meeting this madman, best be careful My girlfriend says if he appears again she's leaving me

Great times in Prague