On this brief information, Fast Formations’ firm formation specialists cowl 4 major issues for operating a UK enterprise from overseas. Additionally they reply widespread questions non-resident administrators usually have, corresponding to the right way to keep compliant.
Whether or not you’re beginning out or already operating a UK restricted firm, shifting overseas is an thrilling alternative. With an increase in hybrid and distant working, residing abroad whereas managing your UK enterprise is now fully inside attain.
Can I be a director and run my UK enterprise from overseas?
Excellent news: you may run your UK enterprise from outdoors the UK – be it in Spain, Dubai or past. Nevertheless, as a UK firm director residing abroad, you will need to nonetheless adhere to those guidelines:
- Pay company tax on all firm earnings
- File annual affirmation statements to Firms Home, plus annual accounts on the finish of the monetary 12 months
- Submit your organization tax return to HMRC each 12 months
You’ll additionally have to submit a Self Evaluation tax return in the event you obtain any revenue aside from a director’s wage.
What’s extra, you’ll want to fulfill obligations, corresponding to having a registered workplace handle within the UK, opening a enterprise checking account in your nation of residence, and understanding which taxes to pay.
When you’re residing overseas and wish to arrange a UK enterprise, registering a restricted firm is comparatively easy with the help of a UK firm formation agent. Fast Formations presents non-residents packages appropriate for non-UK residents from most nations. These embody necessities, corresponding to a London registered workplace handle and enterprise checking account referrals.
Step 1: Present a registered workplace handle
You’ll want a registered workplace handle and acceptable e mail handle to arrange a UK restricted firm. The registered workplace have to be a bodily handle within the UK and meet all regulatory necessities. Failure to conform might end in your organization being faraway from the Firms Home register. Whereas the registered workplace handle is publicly obtainable, your e mail handle gained’t seem on the general public register.
Step 2: Open a enterprise checking account
Having a enterprise checking account within the UK isn’t a authorized requirement – you may open one in your nation of residence. Nevertheless, many non-UK resident administrators choose to have one within the UK, because it helps with managing your UK firm’s funds. To take action, you may:
- Open an account with a UK financial institution providing account companies to non-UK residents
- Legalise your organization paperwork to be used in your house nation
The selection is yours, however an organization formation agent might help simplify the method. For instance, Fast Formations companions with Smart (previously TransferWise) to offer Smart Enterprise Accounts, providing entry to account particulars in over 9 currencies and extra.
Step 3: Perceive the enterprise taxes it’s worthwhile to pay
Eager about operating a UK enterprise from overseas? Understanding which taxes to pay is essential and may be advanced even for UK-resident administrators.
For enterprise tax, you’ll pay the identical company tax price on all earnings and chargeable positive factors from the UK and overseas, no matter the place you reside.
Your UK tax residency standing determines what you pay for private tax. Your UK residential standing normally is dependent upon the variety of days spent within the UK through the tax 12 months (sixth April in a single 12 months to fifth April the next 12 months). For sole merchants, there’s no distinction between you and your UK enterprise. You’ll have to file a Self Evaluation tax return, along with your residency figuring out in the event you’re taxed on UK revenue solely or worldwide revenue.
This will have vital implications, so we strongly suggest consulting an accountant with expertise in non-UK resident tax issues.
Private tax implications for UK residents
You’ll solely be classed as a UK resident in the event you meet a minimum of one of many automated UK assessments:
- You spend 183 days or extra within the UK through the tax 12 months
- Your solely house is within the UK, and also you spend a minimum of 30 days there within the tax 12 months
- You’re employed within the UK full-time for any 365-day interval
Alternatively, you meet the enough ties take a look at, otherwise you don’t meet any of the automated abroad assessments.
For all above instances, you will need to pay revenue tax in your worldwide revenue.
Private tax implications for non-UK residents
When you spend fewer than 183 days within the UK throughout a tax 12 months, you’re thought of a non-resident and solely pay tax on revenue from contained in the UK.
Non-resident administrators (NRDs) residing overseas for 183 days or extra in a tax 12 months should pay private tax on any UK earnings – even for minimal visits, corresponding to one assembly. Your nation of residence might also tax your UK revenue, however you can declare tax reduction if it has a ‘double taxation settlement’ with the UK.
NRDs don’t pay UK tax on dividend revenue except ‘split-year remedy’ applies. Nevertheless, UK company tax is deducted from firm earnings earlier than dividends are distributed. Dividend revenue should nonetheless be reported on a Self Evaluation tax return if required, and Nationwide Insurance coverage contributions could apply to UK revenue.
Step 4: Take into account bills when travelling to the UK
Earlier than organising or operating a UK enterprise from overseas, consider journey prices to the UK. Search specialist recommendation concerning on whether or not journey and lodging bills are taxable or exempt. NRDs travelling to the UK for enterprise should report any enterprise journey and related revenue to keep away from monetary or reputational dangers.
Bear in mind, utilizing a registered workplace handle service may also make it easier to keep away from enterprise journeys wanted for administrative causes, corresponding to amassing your organization put up.
Non-resident administrators: FAQ
Establishing a UK enterprise from overseas or operating it abroad is thrilling however could also be daunting at first. To assist ease the method, check out the solutions to a number of the commonest questions non-resident administrators ask.
Does FSCS cowl non-UK residents?
The Monetary Providers Compensation Scheme protects prospects by paying compensation when monetary companies companies fail. It covers non-UK residents and can shield as much as £85,000 in whole throughout all accounts you maintain. This implies you may handle your UK enterprise overseas and relaxation assured that you simply gained’t lose all of your financial savings in case your financial institution or constructing society goes bust. Nevertheless, for it to use, the financial institution or constructing society have to be UK-authorised.
Learn how to keep compliant when working a UK firm from abroad
HMRC can simply determine compliance dangers for NRDs by reviewing short-term enterprise guests and cross-referencing Firms Home knowledge with PAYE Actual Time Info (RTI) submissions, which embody data despatched to HMRC about NICs, revenue tax and extra.
Though compliance may be tougher for NRDs, failing to fulfill UK obligations or function PAYE or NIC the place wanted may end up in monetary penalties and reputational injury.
Luckily, detailed steerage is on the market from the specialists at Fast Formations.
Learn how to liquidate a UK restricted firm
You may liquidate or ‘wind up’ your UK enterprise from abroad. Your organization will cease doing enterprise and using folks, and it is going to be faraway from the businesses register at Firms Home.
The foundations are the identical for all UK firm administrators: adjust to UK insolvency laws and search recommendation from a licensed insolvency practitioner.
Fortunately, you may make cellphone calls, ship paperwork electronically, and have digital conferences along with your licensed insolvency practitioner to keep away from travelling to the UK.
Efficiently run your UK enterprise from overseas
Transferring overseas is an thrilling prospect, however preparation is essential. Earlier than you embark on this new chapter, guarantee you’ve gotten a UK registered workplace handle, an appropriate enterprise checking account, and a strong understanding of your tax obligations. Loads of sources can be found to information you, together with knowledgeable recommendation from firm formation brokers.
Attain out to the main staff of specialists at Fast Formations and see the way it’s simpler than ever to run your UK enterprise from overseas.