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Newbie forming Uk company but EU resident abroad

I'm going freelance and want to form in the UK but be resident in Portugal (where it's warm)

Hi everyone!

I'm taking the plunge into freelance consulting and despite reading up on the topic for months now, am still somewhat confused as to the tax situation. It may well my problems/solutions are really obvious, but I had to never concern myself with tax details due to a life of company employment.

I'm a EU citizen with long roots in the UK, and would like to form my company there: easy to start up, all in English, lots of clients, internationally recognized and easy to deal with. Unfortunately, I would like to live somewhere warmer and cheaper than London and have decided on Portugal, which also might give me a favourable NHR tax rate.

I am now somewhat confused as to how I will pay tax. I will have business coming in from all over the world, funneled through the UK company.

How do I best pay myself, and do I need to file in both UK and Portugal?

Will I have to pay corporation tax in the Uk and then income tax in my country of residence?

Sorry if these are dumb questions, but I can't seem to find clear answers on this at HMRC (I did call) or on the web.

Thanks for any advice,

F

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21st May 2018 03:26

You appear to be asking in the wrong place. This is a forum for UK accounting and tax professionals. You will need to read the tie-breaker clauses in the relevant DTA carefully but it is unlikely that either the company nor yourself will be UK resident for tax purposes, so you should appoint a professional adviser in your proposed country of residence who can advise you on the relevant tax implications for your venture. Make sure you include a sensible budget for the advice as getting it wrong is likely to cost a lot more than getting it right in the first place.

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21st May 2018 07:15

Note in particular that "unlikely" does not mean "impossible" - and indeed that the answer may change after you have set up the company, which is just another potential complexity (? planning point?) to consider.

People appear to use search engines to find one-size-fits-all answers. These very rarely exist in tax, so I am glad you have not found one - you would, very likely, have got it wrong. It always depends on the facts of the case.

As Tim says, you would be wise to take advice - here and in Portugal. Sometimes you have to spend to save. This is one of those times.

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By Kuei
21st May 2018 07:43

Hi guys, this a lot more clear advice than what I have gotten out of other places, so I'm quite happy I asked in the wrong place. ;)

I'm just not keen to tank the first business I ever start, or discover I owe years in tax several year in the future.

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By Matrix
21st May 2018 07:45

What's wrong with the reply I gave you last week? You don't choose where you pay tax, it depends on the facts. There is no UK connection, just get a Portuguese adviser.

https://www.accountingweb.co.uk/any-answers/paye-and-ni-for-uk-employee-...

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By Kuei
21st May 2018 07:55

Hi Matrix,

I joined to today, so not sure what you mean, but the link is interesting none the less. Didn't come up in my initial search, so thank you!

F

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