Anonymous
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Director being paid as a consultant

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I have a bit of a tricky one on my hands here and would appreciate a few constructive opinions. I have a company whose director operates almost entirely from abroad. He has spent over 7 years away from the UK with 2 years in Seoul/Philippines and 5 years as a tax resident in Australia with a sponsored working visa. He is now a permenant resident of Paraguay and has a tax ID for Paraguay. At no point over the past 7 years has he spent more than 60 days in the UK. His company accounts have payments out to this director as consultancy fees and so I'm inclined to include them as a trading expense and just leave it at that. I contacted HMRC quite some time ago and they agreed that the payments should go through the company as consultancy fees.

I'm inclined to just roll with it and let the director deal with his own personal tax affairs, but would welcome any input.

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By sarahg
08th Apr 2021 10:05

Why anon and what's your question?

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By Wanderer
08th Apr 2021 10:08

Few points come to mind:-
Are you sure any overseas tax on the company has been correctly paid / treated?
Have you considered the DTA's / Unilateral relief?
Have you considered the overseas equivalents of PAYE?

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By lesley.barnes
08th Apr 2021 11:19

How is the UK company earning money. Is the Director earning the money overseas that goes into his Company and he then invoices the company as a consultant?

I found this article - I'm not sure if it helps with this situation.

https://www.taxadvisermagazine.com/article/perils-and-pitfalls-non-uk-re...

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Replying to lesley.barnes:
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By TruffleShuffle
08th Apr 2021 12:59

Thanks. The UK company earns it's money by invoicing other UK companies. The director then invoices the company as a self-employed consultant (no a company). I'll have a read through the article. I wanted to post here just to gauge opinions and get people's thoughts really.

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Replying to TruffleShuffle:
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By More unearned luck
08th Apr 2021 17:44

I don't think that you meant what you said. There are, I understand, crooks who send businesses invoices for non-existent services in the hope that, owing to lax internal controls, the invoices are paid. You make it sound like your client is one such crook. What does the company do?

BTW if you are to (mis)use the anon option then you must resist the temptation to reply.

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By Martin B
08th Apr 2021 17:01

The non resident director has no uk personal tax obligations. I would simply show the payment as 'directors remuneration' and inform him to deal with his personal tax in the overseas countries.
Whether the Uk company has an overseas presence/tax obligations is a seperate matter.

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By Martin B
08th Apr 2021 17:19

On the assumption the non resident director has no uk personal tax obligations. I would simply show the payment as 'directors remuneration' and inform him to deal with his personal tax in the overseas countries.
Whether the Uk company has an overseas presence/tax obligations is a seperate matter.

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