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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have about to set up a limited company. I am acting as a

Customer Question

I have about to set up a limited company. I am acting as a consultant to a Cyprus client that pays me £7000 per month into my UK account. At the end of the tax year when I declare my earning for the ltd company. What do I have to do to prove those earnings?
Will the tax authorities contact my client? Do I need to show my bank statements for the year? How does it work?
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.

Hi

 

Thanks for your question - I am Sam and I am one of the UK tax experts.

 

You should ensure that you have invoices that you raise to the offshore company detailing the money earned - which then will tie in with the amount that arrives in the bank account.

You then at the end of each accounting year complete a Corporation tax return with figures and accounts - and HMRC only need the bank statements and other relevant receipts/invoices if they choose to look further into your accounts. But you do have to retain this documentation for 6 years

 

BUT if this si to be your only client then you may have to be treated as an employee depending on the terms on which you are engaged (which will mean operating a simple PAYE scheme on your money have have tax and National Insurance deducted from it and paid over to HMRC monthly - so do ensure you are not in breach of IR35 legislation with this.

 

Let me know if I can be of any further assistance


Thanks


Sam