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Having Estonian e-resident company and expensing my UK limited company

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    Having Estonian e-resident company and expensing my UK limited company

    Hello,
    I am thinking to use an Estonian company because of Brexit in case it is turning bad and to have Euro in the bank instead of pound.

    Now I am wondering if it possible to invoice my UK limited company with the Estonian one so that my expenses are going thought the Estonian one.
    For exemple, my Estonian company would provide the accommodation, food and other living cost to the UK limited company. I will need to create a monthly invoice with all cost from the Estonian company to the UK limited company.

    The problem is that I am wondering if it is legal ?

    Thanks

    #2
    I'm not aware that it is explicitly illegal.

    However if you gain a tax advantage from it, and it is deemed that the setup has been done purely for that purpose then it falls under GAAR.
    https://www.gov.uk/government/public...ti-abuse-rules

    It would certainly increase your chances of an investigation.
    Wouldn't you be better off to run a normal UK business and invest your personal cash in Euros (Bitcoins, USD, gold etc.) as you desire?
    See You Next Tuesday

    Comment


      #3
      If you are UK resident and earning money in the UK then you have to pay UK taxes. Your suggested arrangement will still result in a BIK charge on you personally. The taxman would most likely see this as a sham arrangement (even if it isn't) and assume you are trying to evade taxes.

      So yes, it is legal, just a very bad idea.

      Instead, why not move your UK profits into a Euro bank account. Not that you need to anyway, the pound may go down - or even up - post Brexit but it isn't going to fail.
      Blog? What blog...?

      Comment


        #4
        Originally posted by Lance View Post
        I'm not aware that it is explicitly illegal.

        However if you gain a tax advantage from it, and it is deemed that the setup has been done purely for that purpose then it falls under GAAR.
        https://www.gov.uk/government/public...ti-abuse-rules

        It would certainly increase your chances of an investigation.
        Wouldn't you be better off to run a normal UK business and invest your personal cash in Euros (Bitcoins, USD, gold etc.) as you desire?
        You sure that's right?
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by northernladuk View Post
          You sure that's right?
          Yup.
          Sentence 1 is completely accurate.
          Sentence 2 seems pretty good.
          Sentence 3 is pure speculation, but I still believe accurate.
          Sentence 4 is just common sense.

          What do you think is wrong?
          See You Next Tuesday

          Comment


            #6
            Originally posted by Lance View Post
            Yup.
            Sentence 1 is completely accurate.
            Sentence 2 seems pretty good.
            Sentence 3 is pure speculation, but I still believe accurate.
            Sentence 4 is just common sense.

            What do you think is wrong?
            Dunno. Just wondered if you were doing a 'Lance' or were OK in this instance
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Originally posted by northernladuk View Post
              Dunno. Just wondered if you were doing a 'Lance' or were OK in this instance
              still on just the 2.
              Hey I give my advice freely, and to coin a phrase 'you get what you pay for'.

              IANAL/IANAA
              See You Next Tuesday

              Comment


                #8
                Originally posted by Lance View Post
                still on just the 2.
                Hey I give my advice freely, and to coin a phrase 'you get what you pay for'.

                IANAL/IANAA
                Damn straight. Just pullin' your leg.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  Originally posted by Vivicou View Post
                  Hello,
                  I am thinking to use an Estonian company because of Brexit in case it is turning bad and to have Euro in the bank instead of pound.

                  Thanks
                  If you just looking for EUR account outside UK - you'll be better off if you just open bank account in Estonia for your UK company:
                  Opening a current account for businesses registered abroad | SEB

                  Creating any artificial turnover is risky and will require consultations from both UK and EE accountants.

                  Comment

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