Depending how the business was split, one company who is keeping all the losses could pay more, or the company not getting the losses could pay less, for the business to take account of the value of the losses.
If you don't have at least one UK resident director then the company may not be managed and controlled in the UK. That could give a weird dual residence situation for the company which you might rather avoid.
The answer is not simple, it depends on your circumstances (for example how much you currently earn and what the income from your new venture will be) and it makes sense to go to an accountant in order to have the situation assessed for your circumstances and to understand all the pros and cons of a ltd company.
No point posting in a discussion forum something that isn't up for discussion
In your opinion (and doubtless others) but I have a perfect right if I think it worthy of some discussion. The fact that there has been some rather diminishes your view, I would suggest.
You think I'm wrong. Fine but don't take it upon yourself to censor an alternate view.
First you say there is no need to reply, now you say it's worthy of discussion!
Besides, I did not censor your view whatsoever. You gave your opinion and I gave mine. This is a well discussed topic, the answer on these tax avoidance discussions always comes down the fact that tax planning isn't black & white, it's shades of grey. Everyone will have a different point at which they consider tax planning has become morally unacceptable. That was the crux of my previous comment.
Minimum salary/dividend is not "entirely artificial" at all. For somebody who owns and runs their own company, they have a choice as to what proportion salary and what proportion dividend to pay themselves. There is no reason to choose any particular split other than the tax levy which is charged, so that is reason enough to structure the company in such a way that it minimises tax (something every person is entitiled to do).
That is a totally different scenario to a tax avoidance scheme (something associated with abusing tax rules, i.e. to use them in a way they are not intended) or to take advantage of international tax rules in such a way to avoid paying a fair share of tax where you operate (e.g. locating activities offshore).
You can't paint all tax planning with the same "tax avoidance" brush... next you'll be telling me you shouldn't claim child allowance if you can afford not to, because its costing the Exchequer money it needs to run the country. Or that investing in an ISA is tax avoidance.
Sorry to hear it wasn't a success. I am surprised you only collected clients from a website, but anyway it's not worth discussing that now. Best of luck for the future...
This is a complex area. You have not given an entirely clear fact pattern, which also makes it difficult to comment. Does somebody operate PAYE on the salary of the UK resident employee? If so, it seems likely they will also need to operate PAYE on certain share awards to the employee, as they will form part of his/her emoluments.
If the Dutch share scheme has not been formerly approved by HMRC, then it seems reasonable to assume that it's an unapproved scheme.
The way share option schemes typically operate is that an employee is granted options to buy shares in a company at a later date, and a particular price (the exercise price). If the exercise price is similar to the company's share price at the date of grant, then the grant is not iself normally a taxable event. In this case, the taxable event will normally be when the options are exercised. You refer to the Dutch parent being purchased resulting in a "gain" on the share options. But you don't explain what you mean by this. Upon purchase of the parent company, the share options may have been cancelled or they may be replaced with shares in another company or with cash. You will need to find out exactly what happened to understand the UK tax treatment.
My answers
Sort of
Depending how the business was split, one company who is keeping all the losses could pay more, or the company not getting the losses could pay less, for the business to take account of the value of the losses.
HMRC have some
Have you seen these?
But
If you don't have at least one UK resident director then the company may not be managed and controlled in the UK. That could give a weird dual residence situation for the company which you might rather avoid.
Not so simple
The answer is not simple, it depends on your circumstances (for example how much you currently earn and what the income from your new venture will be) and it makes sense to go to an accountant in order to have the situation assessed for your circumstances and to understand all the pros and cons of a ltd company.
Hmm
First you say there is no need to reply, now you say it's worthy of discussion!
Besides, I did not censor your view whatsoever. You gave your opinion and I gave mine. This is a well discussed topic, the answer on these tax avoidance discussions always comes down the fact that tax planning isn't black & white, it's shades of grey. Everyone will have a different point at which they consider tax planning has become morally unacceptable. That was the crux of my previous comment.
@ Peter
No point posting in a discussion forum something that isn't up for discussion
@Peter
Minimum salary/dividend is not "entirely artificial" at all. For somebody who owns and runs their own company, they have a choice as to what proportion salary and what proportion dividend to pay themselves. There is no reason to choose any particular split other than the tax levy which is charged, so that is reason enough to structure the company in such a way that it minimises tax (something every person is entitiled to do).
That is a totally different scenario to a tax avoidance scheme (something associated with abusing tax rules, i.e. to use them in a way they are not intended) or to take advantage of international tax rules in such a way to avoid paying a fair share of tax where you operate (e.g. locating activities offshore).
You can't paint all tax planning with the same "tax avoidance" brush... next you'll be telling me you shouldn't claim child allowance if you can afford not to, because its costing the Exchequer money it needs to run the country. Or that investing in an ISA is tax avoidance.
But
If the UK companies contracting your client have a branch in Qatar then UK VAT would not be applicable....
:(
Sorry to hear it wasn't a success. I am surprised you only collected clients from a website, but anyway it's not worth discussing that now. Best of luck for the future...
Complex
This is a complex area. You have not given an entirely clear fact pattern, which also makes it difficult to comment. Does somebody operate PAYE on the salary of the UK resident employee? If so, it seems likely they will also need to operate PAYE on certain share awards to the employee, as they will form part of his/her emoluments.
If the Dutch share scheme has not been formerly approved by HMRC, then it seems reasonable to assume that it's an unapproved scheme.
The way share option schemes typically operate is that an employee is granted options to buy shares in a company at a later date, and a particular price (the exercise price). If the exercise price is similar to the company's share price at the date of grant, then the grant is not iself normally a taxable event. In this case, the taxable event will normally be when the options are exercised. You refer to the Dutch parent being purchased resulting in a "gain" on the share options. But you don't explain what you mean by this. Upon purchase of the parent company, the share options may have been cancelled or they may be replaced with shares in another company or with cash. You will need to find out exactly what happened to understand the UK tax treatment.