Share this content

Partner in LLP invoicing LLP from foreign entity

Member of LLP wants to invoice LLP from his sole trader company in Poland - possible?

Didn't find your answer?

Hi

My partner (UK citizen) and I (Polish citizen) have formed LLP in the UK to provide consultancy business. We as individuals are partners in LLP.

Apart from LLP, I have a sole trader legal entity in Poland, which enjoys decent flat tax rate of 19% (regardless of income).

My partner is reporting taxes in the UK on his personal level.

My question is - can I use my sole trader Polish entity to invoice LLP -> be taxed in Poland with 19%?

Example

  1. Client wires us 1,000
  2. I invoice LLP for 500 -> taxed in Poland
  3. Remaining 500 is drawed by my partner -> taxed in the UK

Not sure if explained correctly, but you hopefully get my idea. What are my options?

Thanks!

Replies (7)

Please login or register to join the discussion.

My photo
By Matrix
12th Oct 2020 07:24

No it doesn’t work (invoicing a partnership from a personal company). How would you get the money back to yourself anyway without paying additional tax?

If you want to pay tax at 19% then set up a UK company. And obtain bespoke professional advice on tax efficient profit extraction.

Thanks (0)
avatar
By frankfx
12th Oct 2020 09:49

Have you reached the conclusion that the UK HMRC tax authrioties will not seek to tax the Poland income (s)?
Have a look at a / your Self Assessment Tax Return, HMRC viewpoint is there in full view.

Thanks (0)
avatar
By ololol
12th Oct 2020 13:50

Ok, maybe I wasn't clear - I am a Polish resident, I don't live in the UK, just have a partnership there to keep one entity.

Idea I got - we switch from LLP to LP - where my friend is a sole partner.
I can then invoice his LP for my part - and he has the profit for himself.

I understand this would be okay?

Thanks (0)
avatar
By Tax Dragon
12th Oct 2020 14:28

None of this has happened yet, right?

You and your partner would do well to take advice. A bullet point Q+A in here is a waste of your time and ours.

Thanks (0)
avatar
By ololol
12th Oct 2020 17:05

We have LLP at the moment and are contemplating our options as it doesn't work as we imagine.

We are going to talk to an advisor, but from what I understand LP combo would work. I trust my friend 100% and he would be the only shareholder of an LP. I would completely break ties with it, only have my Polish entity.

Also, why waste of time? This is a forum board to ask questions.

Thanks (0)
Replying to ololol:
avatar
By Tax Dragon
12th Oct 2020 17:33

Yours, because what you need is advice, not bullet "answers".

Ours... well, you clearly don't care about ours.

Thanks (0)
By Paul D Utherone
12th Oct 2020 17:56

Olek Skwarczek wrote:

Hi

My partner (UK citizen) and I (Polish citizen) have formed LLP in the UK to provide consultancy business. We as individuals are partners in LLP.

Apart from LLP, I have a sole trader legal entity in Poland, which enjoys decent flat tax rate of 19% (regardless of income).

My partner is reporting taxes in the UK on his personal level.

My question is - can I use my sole trader Polish entity to invoice LLP -> be taxed in Poland with 19%?

Example

Client wires us 1,000I invoice LLP for 500 -> taxed in PolandRemaining 500 is drawed by my partner -> taxed in the UK

Not sure if explained correctly, but you hopefully get my idea. What are my options?

Thanks!

Thanks (0)
Share this content