UK branch

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Prospective client has been sent to the UK to set up a branch of  an Australian parent. They don't want to incorporate for a least a year while they test the market. Bookkeeping will be done by Aus except raising sales invoices, which will be done by the client  The client is on a salary + expenses incurred in running the branch

Im my humble..... I think the business has to be registered with HMRC as the UK branch of an AU company. They seem to think she could set it up as self employed business in her name, whihc would make her liable if they dump her

Any thoughts gentlemen

I seem to be getting a lot of strange prospects recently

 

Replies (5)

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RLI
By lionofludesch
05th Mar 2019 13:39

She gets a salary AND the profits of this self employment ?

Or she gets a salary and sends all the profits to the Australian company ?

What on earth is stopping them incorporating "while they test the market" ? Jeez - it's cheap enough to register a company these days. You can get it done for less than £20. That'd be my advice to the client - protect herself against any debts in this untested market by forming a company of her own. Collect the salary from AusCo and sell the company to them after a year.

Or whatever.

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By bernard michael
05th Mar 2019 13:51

I agree with ltd co now. The trouble is AU sent her over here without explicit instructions
She just gets a salary and not the profit. My worry is that she might end up with the losses

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Replying to bernard michael:
RLI
By lionofludesch
05th Mar 2019 14:03

bernard michael wrote:

I agree with ltd co now. The trouble is AU sent her over here without explicit instructions
She just gets a salary and not the profit. My worry is that she might end up with the losses

Then she needs the company. Her risk. Her decision.

Bu99er the lack of instructions from AusCo. If they're not explicit, she can do as she wishes.

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Psycho
By Wilson Philips
05th Mar 2019 14:22

Comment removed because I read the question the wrong way round!

Although, from an Australian tax point of view, it may be sensible to defer incorporation - assuming their tax rules operate in similar fashion, if the UK branch were to incur losses, the 'parent' should get relief automatically, whereas losses incurred by a UK subsidiary may be stranded.

Key will be the contractual arrangements - who will the UK customers be contracting with? If contracts are in the Australian company's name then, assuming that there is some form of fixed or permanent establishment here, that company should register the branch with Companies House and HMRC (for CT and possibly VAT as well).

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By bernard michael
06th Mar 2019 14:55

The result of discussions is that a branch of an overseas company has to complete a Companies House form IN01 ( 17 pages long). The accounts of the parent company have to be filed annually.
Therefore
She has decided to set up a separate limited company

Thanks for your responses

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