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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have got a guesthouse in Mozambique. I would like to be

Customer Question

Hi thereI have got a guesthouse in Mozambique. I would like to be able to charge some of my international customers by card and get paid directly into an account in the UK. To do that I am requested to open a business account in the UK by the payment gateway company. This takes me to register a new company in the UK that is related to the company I have got in Mozambique.
I would open the company just for the purpose of being paid in a UK account.
The payment gateway company that implements the online card payment service that I want only operates in some countries (including the UK and not including Mozambique).
They request that the account to be used be a business account.
I only hold a personal account in the UK at the moment.
I would therefore open a company and a business account and be paid in the UK for services that I am offering in another country.
I would like to know what kind of company I shall open in the UK for the purpose and what kind of taxation the company and or myself will be subject to. I am resident in Mozambique where I have got so far 100 % of my business interest. I am an Italian / Mozambican national.
Please feel free to add any relevant information. Looking forward to your replyRegards
Andrew
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, Andrew, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

You can easily set up a an UK limited company using one of the numerous bureaux available. These companies have there Articles drawn very wide to cover just about any business activity. There is no requirement for an UK company to have any shareholders or even directors British Citizens and none need reside in the UK. However, the company will need a registered office in England or Wales, but again various commercial outlets offer this service.

Any profits made by the company would be liable to UK Corporation Tax (CT) at 20%. These rates are in a state of flux, Ross Martin advises:

'Legislation was introduced in the Finance (no 2) Act 2015 to reduce the main rate of CT for all non-ring fence profits to 19% for Financial Year 2017, to set the rate at 19% for Financial Years 2018 and 2019, and reduce it to 18% for Financial Year 2020.

It was announced at the Budget 2016 that the CT rate for Financial Year 2020 would be reduced to 17%.'

By billing the company from Mozambique the UK CT liability could, of course, be reduced to zero.

I do hope that you have found my reply of assistance.

Customer: replied 1 year ago.
Hi Keith,
Thanks for getting back to me on this. I would rather keep some money in the UK so I would prefer paying myself a salary to my UK personal bank account to reduce CT liability. I guess that I would be entitled to a 11k £ Personal Allowance and pay income tax only for earnings above this, correct?. I could be the director and only employee of the company. In this case would I be requested to pay also National Insurance? I remind you that I am not resident. What would be the total cost of the new UK company in case I was requested to pay NI? Would the company be requested to add some contribution to the NI I would pay?
Thanks for your kind assistance. Looking forward to your reply
Regards
Andrew
Expert:  bigduckontax replied 1 year ago.

As a director of a company any emoluments you receive must be made through PAYE channels so you will have to register the company for this procedure.

As an EEA citizen you are entitled to a Personal Allowance, currently 11K, and income over that will be liable to UK Income Tax [basic rate 20%]. You will also be liable to UK NI which kicks in at GBP 5965 and is charged at 12%. The company would also have to pay the employer's element of NI also [13.8%].

It might well be a good idea to keep income below these levels.

Please be so kind as to rate me before you leave the Just Answer site.

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Customer: replied 1 year ago.
Dear *****Thanks for giving me a quick and complete understanding of the subject. I can only rate you 5 star.
Best regards
Andrew
Expert:  bigduckontax replied 1 year ago.

Delighted to have been of assistance.

Thank you for your support.

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