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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Is it possible to run limited company or partnership from

Resolved Question:

Is it possible to run limited company or partnership from abroad, when both directors want to live abroad and the company does not have any employees living in the UK? What are the options? How to deal with company cars? What are the best solutions if the company has only one director and no employees? What are the rates for laudry (2.20 or 6 pounds per month?)?
Submitted: 4 months ago.
Category: Tax
Expert:  bigduckontax replied 4 months ago.

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

Customer: replied 4 months ago.
Fantastic.
Expert:  bigduckontax replied 4 months ago.

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

There is no requirement for an UK private company to have any shareholders or directors who are British Citizens nor need they reside in the UK. The company itself, however, must have an UK Registered Office and many agencies offer this facility. A LLP is similar, being a limited liability partnership under the Limited Liability Partnerships Act, 2000 as opposed to the Companies Acts.

I need a little more data regarding company cars and the query regarding 'laudry' eludes me.

Customer: replied 4 months ago.
I mean normal partnership of two self employed people. How about it?Regarding company cars I am not sure about the rules. What is better solution? To buy a car through company, leasing or renting your own one to the company and charging business miles? I know that some taxes needs to be paid if company car is used privately.About the laudry. I mean travel and subsistance claims in the transport company.
Expert:  bigduckontax replied 4 months ago.

Right, so you know about private use of a company car. If the company uses your own car on company business you are entitled to reimbursement at 45p per mile for the first 10000 miles and 25p per mile thereafter. This rough and ready twist of the spoon to stop the treacle running off so to speak is designed top cover both capital and running costs of the vehicle. If there is no private use there is no reason why you should not merely buy the car and run it off the company.

Here is the Gov UK web site advice on subsistence:

'Travel and overnight expenses

If you have to travel for your work you may be able to claim tax relief on the cost or money you’ve spent on food or overnight expenses, called ‘subsistence’.

You can’t claim for travelling to where you work, unless it’s a temporary place of work.

Expenses you can claim tax relief on from your business journey include:

  • public transport costs
  • hotel accommodation if you have to stay overnight
  • food and drink
  • congestion charges and tolls
  • parking fees
  • business phone calls, fax and photocopying costs'

Regarding running a partnership from abroad I am of the opinion that you would have to run such a scheme within the legal framework of the country where those persons are located.

Customer: replied 4 months ago.
Thank you for your answer, but I know this rules very well. I need more specific answers. The lorry driver is entitled to claim laudry costs. What is the flat rate for laudry costs and how about the real costs when the car is bought through company and used privately at the same time. How to calculate the costs to declare in P11D.
Expert:  bigduckontax replied 4 months ago.

What are laudry costs? If you mean laundry then the flat rate annual reduction is GBP 60.

I would suggest that the private usage proportion of the vehicle costs be declared on the P11D.

.

Customer: replied 4 months ago.
That what I claim, but I know that some accounting companies use flat rate of 2.20 for the laundry. Do they do it incorrect?How to calculate exact amount for the car over 130 co2 emissions?
Expert:  bigduckontax replied 4 months ago.

To calculate the amount to be declared on the P11d you use the following form:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/503202/P11D_WS2__2016__12_15.pdf

I have quoted the annual Gov UK flat rate reduction for laundry. Your claim of GBP 60 is quite in order.

Customer: replied 4 months ago.
Ok, thank you. It was very useful. If car is being leased, what price should be entered as the price used to calculate the car benefit charge?Regarding running limited company from abroad I understand all taxes needs to be paid in UK like vat and corporation tax, but how about tax on dividends and national contributions if you live abroad?
Expert:  bigduckontax replied 4 months ago.

I would suggest the car benefit charge be the the private mileage proportion of the total mileage run.

Corporation tax at 20% on any profit made. The company would only need to register for VAT if the aggregated turnover of standard, reduced or zero rated supplies made exceed 83K in any one year. Dividends distributed are tax free up to 5K pa. NI deductions are only appropriate to emoluments paid from the company under PAYE arrangements.

Customer: replied 4 months ago.
Last clarification regarding travel and subsitance claims. The employee of the transport company is eligible for meal allowances: £5.00 for the irregular start before 6 am, 15 pounds for irregular late finish after 8 pm and 10 pounds (if working over 10 hours).
So I imagine the driver can claim 30 pounds in a day when work is irregular and over 10 hours, is that correct?
Expert:  bigduckontax replied 4 months ago.

Indeed!

Customer: replied 4 months ago.
Are you sure its okay to pay national contributions in the UK if you are non resident?
Expert:  bigduckontax replied 4 months ago.

The employer has no alternative if paying through RTI which they must without an HMRC direction to the contrary.

Customer: replied 4 months ago.
34;If an employee recruited overseas is not resident in the UK, generally no PAYE is due unless the non-resident employee performs duties in the UK which are more than incidental to their overseas work. ‘Incidental duties’ are subordinate or ancillary to overseas work, such as training in the UK or general meetings".http://www.hrzone.com/perform/people/employing-people-overseas-tax-and-social-security-considerations
Expert:  bigduckontax replied 4 months ago.

Maybe so, but as they, as directors, have to be paid through PAYE under RTI as directors there is a point which appears to have escaped HMRC's attention.

Customer: replied 4 months ago.
If directors are paid through PAYE they are also considered as employees, isn't it?
Expert:  bigduckontax replied 4 months ago.

Directors are employees per se and must be paid through PAYE.

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Expert:  bigduckontax replied 3 months ago.

Thank you for your support.

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