Does a non-resident need a company for a contract with a Uk agency?

[IanW]

I'm a UK citizen living in South America and have been working for a US company via a Canadian agency. I believe that means I'm not liable for UK tax, correct?

The US company wishes to change its agency to a British one, who first offered me PAYE, then asked me for the registration details of my limited company and VAT details.

Am I right in thinking thinking that having a UK company would then mean I have tax liability in the UK?

What's the best way of making this happen that keeps everyone, HMRC included, happy, without it costing an arm and a leg in international accountancy fees?

ian
...

[NotAllThere]

Did your US client name a specific agency, or are you free to choose? If the latter, phone around until you get an agent who is capable of understanding your situation.

If you are not working in the UK, all the agency has to do is pay your invoices and invoice your client. HMRC do not come into the equation - at least so far as you are concerned.

[BlasterBates]

I'm a UK citizen living in South America and have been working for a US company via a Canadian agency. I believe that means I'm not liable for UK tax, correct?

The US company wishes to change its agency to a British one, who first offered me PAYE, then asked me for the registration details of my limited company and VAT details.

Am I right in thinking thinking that having a UK company would then mean I have tax liability in the UK?

What's the best way of making this happen that keeps everyone, HMRC included, happy, without it costing an arm and a leg in international accountancy fees?

ian
...

Very generally, you pay tax where you do the work, unless you're there for a short time. You can work through a UK Ltd where the local laws permit, eg in the EU. If not at some point the local tax authority might just come down on you like a ton of bricks.

If you ain't in the UK and the work aint there you don't pay UK tax. There are plenty of Ltd's operating in Germany. A company needs to register itself in all the jurisdictions it operates, i.e. a company can be resident in multiple countries. Needs to register local branches, with their own set of accounts and satisfy the regulations of that country.

In all pretty complicated, and if I were you I'd set up a company or register yourself self-employed in the country your working in. If you're not taxable in the country you're working in, then presumably you'll be keeping all your accounts in the UK and the UK tax authority will probably tax it, as you would have no proof of your activities being elsewhere. Would need a clever accountant to sort that one out for you.

If you're actually working in the UK, then you should be paying UK tax anyway, provided you satisfy the residency rules (i.e. you're there for longer than 183 days, regardless of any other tax residency you may have, as you can be resident in more than one country) , But you'll probably get away with it if the billing is done overseas.

[IanW]

Unfortunately it's for a large US corporation who have a limited vendor list.

I'm not in the UK but South America, and I'm keeping my vacations in the UK to under 90 days/year. If I have a UK agency though, are they then deemed to be "where I'm working"?

i

[BlasterBates]

No really you shouldn't be taxed at all. But if you setup a UK company not registered anywhere else but the UK, I could imagine that HMRC would be "confused" to say the least, about the company's earnings. However if you pay yourself a full salary, then at least you should receive that tax free, as you'll be able to prove non-residency.

[NotAllThere]

How limited is the vendor list? Just one choice? If not, play them off one against the other. It's free money for them, if they'd only realise it. Escalate through their hierarchy if the agent you're talking to is too thick - get the directors' names from company house and write them all a letter explaining what you want, and why the agency employees are so dumb they're losing the company money. If the work isn't in the UK and you're not working in the UK, it's pointless to have a UK ltd company.

[ASB]

Just because you work for a UK company does not make you tax resident in the UK. If you are not tax resident in the UK then you don't need to pay tax in the UK. Yes, it can get vaguely complex, but in broad terms the UK employer (i.e. paye) will request a tax code for you (because you cannot provide one). You explain to HMRC how the income is derived and they (eventually) give you an NT tax code (can't remember the for you have to fill in). TBH PAYE is probably your best bet with an NT tax code.

If you incorporate a company in the UK then you should be able to do the same yourself (i.e. pay yourself a salary equal to it's billings and claim non residence, then UK profit = nil, UK CT = nil). However this only involves you in more effort and expense. Of course your situation with regard to the US and SA authorities depends on their local rules.

Ring HMRC explain the situation. Presumably HMRC already know you are non resident since you would have told them when you left right? If not it may be a little more complex.

Might also be worthwhile consaidering where you are domiciled and whether you might have acquired a domicile of choice along the way (unlikely in general).