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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4082
Experience:  FCCA FCMA CGMA ACIS
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Hello, I am planning to set up a UK Company that is set up

Customer Question

Hello, I am planning to set up a UK Company that is set up as an advisory company. the activities is suggestions and recommendations to international institutional investors (M&A). I am enquiring but the only suggestion and recommendations shall not require an FCA regulated company.
There shall be 4 shareholders. 3 Italian resident and 1 Italian UK resident (since 5 years).
Following question: I have been requested to create a UK company which would act as the consultancy/advisory company.
I have heard that might be better to create a European company such as Cyprus or jersey which would then have the UK daughter company as that could be more efficient. please note the activities of this company would be done outside the uk (international investors).and this shall be more tax efficient? thank you, Daniel
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello Daniel, I'm Keith and happy to help you with your question.

Setting up a company in an area with a low corporation tax regime, a tax haven, and then operating a UK company to undertake the actual business activity is commonplace. The UK company is billed from the low tax regime company for services which effectively transfers the profits from the UK to, for example, Jersey or Gibraltar. You will doubtless have read the heavy criticism in the UK financial press recently railing against the practice. Starbucks and Amazon are but two of the big names with such arrangements. However, these services do not come cheap. In Jersey, for example, it is big business and local solicitors etc derive great income from the activity. The same is true of such other tax havens like the Turks and Cocos Islands. Also it is a moot point how long such tax avoidance activities will be permitted before the loophole is closed by statute. You would need to undertake a management appraisal to determine if the method is cost effective, but that is far beyond the scope of this question.

You may not be aware that a UK company need not have any directors who are British Citizens nor need they be located in the UK. That is not the case in Jersey, for example, hence the high costs involved.

I do hope I have been able to shed some light on the international tax avoidance scene. Please be so kind as to rate me before you leave the Just Answer site so my profile is enhanced.
Customer: replied 3 years ago.
Relist: Inaccurate answer.
hello, I was looking at an specific answer more than a lesson on how starbucks and amazon are not paying their taxes. pls help
Expert:  bigduckontax replied 3 years ago.

This answer was not inaccurate in the slightest. You received an explanation of how such activities were organised with examples of some of the big names involved and a warning that legislation might restrict the practice in the future. You were also told of the relatively high costs involved and advised that you would have to make a management appraisal to see whether the process would be cost effective. The answer could not have been more specific than given.

Customer: replied 3 years ago.
Relist: Other.
Inaccurate answer