UAE Company making Sub in UK & Employee

Dubai based firm making a Sub in UK, UK Employee Tax liability, Please advise

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Hi, We are planning to set up a Sub in UK with our parent firm registered here in UAE. We have an employee based in London, 

1) Can we hire the UK employee pay his/her salary directly from UAE? (Who takes charge of NICs)

2) If UK Sub has no Bank account, and Employee is hired for client Servicing in UK - how do we pay Salary to Employee - parent company can do this?

3) UK Sub will not invoice clients, only parent company will, does the UAE company charge taxes for services provided to UK clients (even though UAE is tax free)

Please assist Thank you

Replies (9)

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By Tax Dragon
25th Jan 2019 08:28

You've told us what the UK sub won't do - it won't have customers assets or employees. You haven't said what it will do.

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Replying to Tax Dragon:
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By SamRazdan
25th Jan 2019 08:40

Hi, The UK Subsidiary will have One employee - his/her job is to provide client servicing to all existing clients in UK. The company is in to Concierge services, providing bespoke services to resident clients in and around London specifically.

All our clients have business interest in UAE, and hence the Parent company of the UK Sub will invoice the UAE incorporation of our clients - hence UK Sub will only serve as a physical POC for clients but not engage in actual invoicing.

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By Tax Dragon
25th Jan 2019 10:09

Which entity do you want to pay the UK tax arising? That might influence how you structure the finances.

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By SamRazdan
25th Jan 2019 10:19

UK Entity

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By SamRazdan
25th Jan 2019 10:22

Would you be able to provide clarity to the below;

1) Can we hire the UK employee pay his/her salary directly from UAE? (Who takes charge of NICs)

2) If UK Sub has no Bank account, and Employee is hired for client Servicing in UK - how do we pay Salary to Employee - parent company can do this?

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By David Heaton
25th Jan 2019 11:22

This is much too complex for you to rely on a web forum post. The UK worker can be employed and paid from anywhere, but the structure of the contracts and flow of services will determine who has to pay what and where in tax terms. There are numerous permutations for PAYE, NIC, VAT and corporation tax for the UAE parent and the UK sub.

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Red Leader
By Red Leader
25th Jan 2019 11:25

When will you appoint a UK accountant?

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By SamRazdan
25th Jan 2019 11:45

Thank you all for your valuable response.

I understand there is fair amount of complexity to the case, Will approach a legal firm to advise on structuring, taxation and management.

Regards,

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Replying to SamRazdan:
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By Tax Dragon
25th Jan 2019 13:03

But thank you for the light relief in January.

The recruitment of a UK legal firm and a UK accountancy firm would indeed be in order.

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