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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3811
Experience:  FCCA FCMA CGMA ACIS
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I am UK resident and recently set up a Ltd company (was

Customer Question

Hi, I am UK resident and recently set up a Ltd company (was previously self employed) I have been awarded a contract from a client in Qatar and from tomorrow 2 of my staff members will be working full time there. I will be required to travel there for 3 days every other week. (traveling expenses paid by client) The client pays cash of £50k per month and of this £40k is profit split between myself and my business partner.
Can you tell me what is the most tax efficient way to declare this? should I put it through the company, close the company and declare it as self employed or is there a better way?
In addition to this the client has given me a gift of $500000 US, as a welcome present, is this taxable?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to be able to help you with your question.
The UK has no gifts tax regime so the $500K is outside the scope of taxation. Thank your lucky stars you don't live in France where Gifts Tax kicks in at 5K Euros!
I have assumed that these moneys will be passed through the company. Any profit made by the company will be liable to Corporation Tax at 20%. Any distribution by the company to you by way of salary must, if you are a director, be made through PAYE channels. Thus you will have Income Tax (IT) and National Insurance (NI) charges deducted and thus, to use an old expression, keep your card stamped. Salaries are allowable against the company for CT purposes. You might consider dividends as a medium instead of remuneration, but these do not count against CT for the company and will still be charged for IT in your hands.
If you pay yourself through the company you can regulate the sums you need as convenient from a personal taxation viewpoint and any surplus left in the company only suffers CT at 20%. Your own IT and NI position is covered and I would suggest that this is the better way forward. If you go self employed your NI charges will be higher.
I do hope that I have shown you a way forward in this matter.

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