Hi,
I am writing this message to request a few clarifications regarding my Norway Contract. Please review the point below and advise. Your soonest response would be much appreciated.
I have a UK LTD Company and am working in Norway since June 2018. My Norwegian accountant had asked me to get an A1 certificate as employee of my UK LTD Company which I did received from HMRC and as a result as employee I do not pay any NI in Norway.
a. How I am setup is such that as employee of UK LTD, I pay myself only £1000 p/mth and pass on the payslip to Norwegian accountant, who then only pay tax on this income to Norway Tax authorities. And no NI is due in Norway as I have an A1 certificate.
The rest of the payment is then transferred to my UK LTD business account by the client and I have been told the UK tax rates will then apply to the remainder amount.
b. However, I had applied for a CA3821 certificate for the UK LTD Company which has been declined by HMRC and they has asked that the UK LTD Company shall pay NI contributions in Norway. I am a little confused that as the employee I have an A1 but as the Employer (UK LTD Company) does not and what implications this would have.
Q1: Reading all the forums suggest that 28% tax is due on any income in Norway, will this be applicable on to my employee payments i.e. £1000 p/mth or does the 28% tax needs to be paid on all invoiced by the UK LTD Company?
Q2: The forum also states "It is not possible for the Employer (your Ltd Co) to exempt you from the Norwegian National Insurance system if you are the only employee."
From b above where CA3821 is declined, is UK LTD Company liable to pay 14.1% NI in Norway? Will the situation change if I have another employee working in Norway under my UK LTD Company i.e. then there will be 2 employees with same circumstances?
Q3: Until now, I have been expensing my UK LTD Company using HMRC Scale Rate expenses, will the UK scale rate expenses be exempt from NI in Norway? From my reading of different forums, it suggests that only a max of 20% expenses are allowed in Norway. Does this mean that UK LTD Company needs to pay 14.1% NI on all payments minus 20% max expenses.
Q4: As an example, assuming the numbers below, please advise if my calculation below is roughly correct? Also as a result do I get any NI relief or any other reliefs in UK?
If UK LTD Company Earns = £100K per annum
Expenses = 20K per annum
Norway Tax @ 28% on £80K= 80*0.28=£22.4K per annum
UK Tax = Nill (Double Tax Relief)
Norway NI @ 14.1% on 80K = 80*0.141=£11.28K per annum
Total Net Salary = 80-22.4-11.28=£46.32K per annum plus expense
Total deductions= 33.68/80=0.421 i.e 42.1 %
Is there any NI due in UK as well for the UK LTD company?
Best Regards
MA
I am writing this message to request a few clarifications regarding my Norway Contract. Please review the point below and advise. Your soonest response would be much appreciated.
I have a UK LTD Company and am working in Norway since June 2018. My Norwegian accountant had asked me to get an A1 certificate as employee of my UK LTD Company which I did received from HMRC and as a result as employee I do not pay any NI in Norway.
a. How I am setup is such that as employee of UK LTD, I pay myself only £1000 p/mth and pass on the payslip to Norwegian accountant, who then only pay tax on this income to Norway Tax authorities. And no NI is due in Norway as I have an A1 certificate.
The rest of the payment is then transferred to my UK LTD business account by the client and I have been told the UK tax rates will then apply to the remainder amount.
b. However, I had applied for a CA3821 certificate for the UK LTD Company which has been declined by HMRC and they has asked that the UK LTD Company shall pay NI contributions in Norway. I am a little confused that as the employee I have an A1 but as the Employer (UK LTD Company) does not and what implications this would have.
Q1: Reading all the forums suggest that 28% tax is due on any income in Norway, will this be applicable on to my employee payments i.e. £1000 p/mth or does the 28% tax needs to be paid on all invoiced by the UK LTD Company?
Q2: The forum also states "It is not possible for the Employer (your Ltd Co) to exempt you from the Norwegian National Insurance system if you are the only employee."
From b above where CA3821 is declined, is UK LTD Company liable to pay 14.1% NI in Norway? Will the situation change if I have another employee working in Norway under my UK LTD Company i.e. then there will be 2 employees with same circumstances?
Q3: Until now, I have been expensing my UK LTD Company using HMRC Scale Rate expenses, will the UK scale rate expenses be exempt from NI in Norway? From my reading of different forums, it suggests that only a max of 20% expenses are allowed in Norway. Does this mean that UK LTD Company needs to pay 14.1% NI on all payments minus 20% max expenses.
Q4: As an example, assuming the numbers below, please advise if my calculation below is roughly correct? Also as a result do I get any NI relief or any other reliefs in UK?
If UK LTD Company Earns = £100K per annum
Expenses = 20K per annum
Norway Tax @ 28% on £80K= 80*0.28=£22.4K per annum
UK Tax = Nill (Double Tax Relief)
Norway NI @ 14.1% on 80K = 80*0.141=£11.28K per annum
Total Net Salary = 80-22.4-11.28=£46.32K per annum plus expense
Total deductions= 33.68/80=0.421 i.e 42.1 %
Is there any NI due in UK as well for the UK LTD company?
Best Regards
MA
Comment