How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3363
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I am just about to re-structure my UK business after starting

Customer Question

I am just about to re-structure my UK business after starting up an offshore company. I need to check that the structures we want to put in place are legal etc.

Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Please tell me exactly what you are intending to do in your restructuring.
Customer: replied 3 years ago.

I have a Ltd company, let's call it ABCD Ltd.


 


It trades as ABC. (correct - ABC).


 


Can the company sell the trading name ABC, and the goodwill associated with it, to an offshore company ... so that the offshore company receives the income, and pays ABCD Ltd a management charge to do the work?

Expert:  bigduckontax replied 3 years ago.

No problem at all, yes.

Customer: replied 3 years ago.

You can see what we're trying to do ... avoid VAT by having the offshore company take all the income.


 


The offshore company pays £78,500 a year to ABCD in management fees. This is ABCD's only income - just below the VAT threshhold.


 


Then ABCD uses its come to pay all the bills, wages etc.


 


Is that legal / ethical?


 


 

Expert:  bigduckontax replied 3 years ago.
You must be careful not to exceed the limit. It's perfectly legal and there are no ethics in taxation. remember ladies of the night keep extensive records in case of investigation by HMRC!
Customer: replied 3 years ago.

OK, many thanks one other aspects, if you don't mind:


 


The offshore company is, say, JJJJ Ltd, registered in Gibraltar. Should it now become: JJJJ Ltd, Trading as ABCD?


 


And client contracts etc. Are they issued by JJJJ Ltd?

Expert:  bigduckontax replied 3 years ago.
Why bother? It seems an awful palava for no good reason.
Customer: replied 3 years ago.

But who does that client have the contract with - the offshore company they pay, or the UK management company who delivers the service etc. Who do they sue / ask for their money back if there's a problem?


 

Expert:  bigduckontax replied 3 years ago.
The company who delivers the service, the UK management one. What they do with their funds are of no concern to the client.
Customer: replied 3 years ago.

Oh. That's a revelation, many thanks!


 


So we can carry on as we are - same website, ABC.com, and use the same online contract, which is with ABCD Ltd. But the client doesn't need to know that JJJJ get the money?

Expert:  bigduckontax replied 3 years ago.
It is of no concern whatsoever to the client.
Customer: replied 3 years ago.

wow. That's really helpful Keith. Presumably, the management agreement needs to be worded so that ABCD Ltd has legal liability towards the clients, or something? Is there a sample management agreement you can point us to?

Expert:  bigduckontax replied 3 years ago.
Presumably you mean the agreement between the UK and the Gibraltar companies? If so it would be a good ides.

Unfortunately Just Answer policies preclude me form recommending third party offerings. You will have to search the net yourself.
Customer: replied 3 years ago.

OK that's fine. MANY thanks. So helpful. I may be back to you later when things get going.

Expert:  bigduckontax replied 3 years ago.
Pleased to be of assistance.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3363
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your excellent support.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.