Disregarded Income for Non-Tax Residents

[NotAllThere]

Do they? From A guide to forming a UK company as a non-UK resident | Companies Made Simple

I stand corrected. Things have moved on.

Again, I'm interested in knowing what the tax on the DIVIDENDS will be. It seems the dividends are treated in a different way. The income tax on the salary should be paid in the UK. I get that.

If you earn income, as a non-UK tax resident, on dividends from a UK company, they'll be subject to the tax regime of your home country

Notwithstanding BB's comment.

[eek]

Again, I'm interested in knowing what the tax on the DIVIDENDS will be. It seems the dividends are treated in a different way. The income tax on the salary should be paid in the UK. I get that.

What does your accountant say? As this area is complex you really do need to find one with expertise in offshore directors - see my previous post as it's complex and easy to get wrong.

[BlasterBates]

I don't see HMRC allowing foreigners to come to the UK work for 3 to 6 months and pay no tax because it is distributed as dividends. They expect earnings to be taxed. HMRC would have to clamp down because the implications in lost tax would be considerable.

I would strongly advise against it.

[NotAllThere]

I don't see HMRC allowing foreigners to come to the UK work for 3 to 6 months and pay no tax because it is distributed as dividends. They expect earnings to be taxed. HMRC would have to clamp down because the implications in lost tax would be considerable.

I would strongly advise against it.

It's like any tax avoidance loophole - there are risks. And it definitely is a loophole, but not one, I think, that's widely exploited.

[BlasterBates]

It's like any tax avoidance loophole - there are risks. And it definitely is a loophole, but not one, I think, that's widely exploited.

How do you know it is definitely a loop hole ?

I think only an accountant would be qualified to advise on that. There could well be restrictions on working yourself for the company from which you are earning tax free dividends. I would not assume it is a loophole unless I had an accountant doing my accounts and being upfront with HMRC about it. There's no point in hiding this from the HMRC because sooner or later they'll enquire.

There are a large number of foreigners who work seasonally or carry out short projects in the UK, if this was a loophole I would expect it to be exploited on a large scale.

[NotAllThere]

How do you know it is definitely a loop hole ?

Experience and talking to accountants over the years. HMRC might choose to see the dividends as income. If uncontested, the OP would accrue a debt to HMRC, that might even be enforceable in his country of residence.

The OP should, as you say, get professional advice to determine the level of risk.