I am a director of a UK company and use contractors to perform consultancy services. One of my contractors uses an off shore company as a vehicle to bill my UK company.
The question I have is what are the risks (from a tax perspective ' if any) associated with this type of transaction (ie the off shore dealing)?
Also if an employee of one company (off shore) who is also a director/shareholder/beneficial owner of a UK company bills the UK company (who he/she is a joint-director of), is this legal? By that it is meant is this allowed under current tax legislation or would this be deemed not to be an arms length transaction?