Best tax strategy

I don't know what your turnover is annually. But if its less than £100k use a UK company. Then the key is to reduce your effective tax rate.

Have you read my post below in regards to reducing taxes for a UK company. The key would be to make use of maximum deductions

https://www.offshorecorptalk.com/th...ate-tax-residency-in-the-uk.27553/post-113297
I give you an example for UK company with £85,000 income:

£85,000 Income
£40,000 tax deductible company pension contribution (cash account)
£12,500 Salary (tax deductible and tax free) - £465 National Insurance
£5,000 Registered office + Accounting + General Expenses
£27,500 is then your taxable income
£5,225 is then your corporate tax on taxable income to be paid
£22,275 is then your profit
£22,000 you declare as dividend
£2,000 is your UK tax free dividend allowance
£1,500 is dividend tax you pay (at 7.5% rate)

£72,035 is total Income = Salary + Dividend + Pension (Cash stash)

£12,965 is total taxes you pay overall

Total tax loss overall on £85,000 income is 15%

Hopefully I got these numbers right as I am doing it off head and using £85k figure to exclude needing to show VAT in sample calculation smi(&%. If your annual income is much more then expense away a lot more.

apple20 said:

1. So I have been reading about dividends, is that cash?? not shares? i.e you cash out of the company?

Thats cash

apple20 said:

2. Is there limit on the dividends? so as long as you declare your profit, you can cash out the rest as 7.5% dividends? Also non resident as well the same? even for 7 figure business or more?

There is no limit on dividends after paying corporate tax. You can pay out all profit as dividend but may fall into a higher dividend tax band. 7.5% rate is if your income tax band falls into the basic rate tax. Remember you always have £12,500 of tax free earnings in UK but will have used it up in my example in order to reduce corporate tax by deducting it as a wage. For a non-resident it is different. A non-resident can receive a dividend lump sum with no tax paid in UK. They then have to pay or not pay tax in their home country depending on their home country treatment of foreign dividend earnings.

None of this should be taken as tax advice. So please consult a professional tax advisor who knows what he/she is doing :p.

gov.uk/tax-on-dividends
Dividend Tax band:

Income Tax Band:

apple20 said:

How many days away is it lol? 3 months or 30 days?

It's more complex than that. Please follow the below flow chart to determine your residency.

home.kpmg/content/dam/kpmg/pdf/2016/01/statu…lowchart.pdf

apple20 said:

Thank you Martin, that is very complicated, is it done like that in purpose? lol

Yes. To screw people over sadly.

apple20 said:

The calculation above for tax saving, do you have anything like it for VAT??

VAT is dependent on whether you have B2B sales of B2C sales. B2B sales in EU are generally VAT exempt. B2C sales in EU you are forced to charge VAT. Then sales outside the EU you do not charge VAT. Then their is VAT exempt goods, different rates of VAT for certain goods etc etc. It's too complex to bother with and best to consult an expert...lol.

That's an wonderful example @Martin Everson really, thanks for spending so much time on it.

can a offshore non resident company own this uk company? uk company acts as an agent with fees up to lets say 3% and merely receives and transfer money?
and from that 3% uk company pays tax?
does not work anymore?

private human being aka sheep or a cow ,better not touch anything nor own or else