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 Sam Your Own Question
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 14280
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

I would like to set up a company in the UK. I have a tier

This answer was rated:

I would like to set up a company in the UK. I have a tier two youth mobility visa and is currently located in the UK. I will have a contractor from Canada working for me and will be providing business consulting services online to individuals located in the UK and other parts of EU. Do I need to register for a local bank account and VAT? The contractor who is working for this new UK company is located in Canada. Please provide any tax compliance requirements for this company and external contractors. Thank you.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Hi

Thanks for your patience

Yes if the company is set up and will be operating in the Uk then you need a UK bank account linked with the limited company and also need to register with HMRC for Corporation tax and Companies House for the UK company.

You also need to set up PAYE so you can pay you and your overseas employee (as there are strict guidelines as to whether they can be treated as a contractor, so you will have to establish if HMRC agree to this arrangement)

Hi

if your turnover will exceed £85,000 in any 12 month rolling period then you ned also to register for VAT#

Let me know if you need links to activate any of these

Thanks

Sam

Customer: replied 4 months ago.
Thanks, ***** ***** be possible for you to elaborate or provide a link regarding "as there are strict guidelines as to whether they can be treated as a contractor, so you will have to establish if HMRC agree to this arrangement)" ? Thanks
Customer: replied 4 months ago.
The reason why I want further elaboration is that PAYE seems to be an arrangement under payroll, but I don't foresee paying my contractors unless there's work, which means they are working freelance. Also, they are treated as a separate entity, is PAYE a strict requirement under this circumstance? I.e. virtual assistance for one project that lasts for 1 week, do I have to register that person as well with the HMRC if they are located oversea?

Hi

Yes of course

Employment status are the guidelines re whether an individual has to be employed or can be engaged (in a contractor/self employed capacity) link here https://www.gov.uk/guidance/check-employment-status-for-tax

Then to register a limited company for companies house and corporation tax purposes and other requirements https://www.gov.uk/limited-company-formation/set-up-your-company-for-corporation-tax

Then setting yourself up as a PAYE employer to pay salaries https://www.gov.uk/register-employer

Register for VAT (If needed) https://www.gov.uk/vat-registration

If you have any specific questions I would be happy to assist further but I cannot go through all those topics as I am sure you can appreciate with the context you will read - how much time that would take - so I have given you the legislation and requirements within that legislation and the ability to proceed with getting those requirements met but will then ask any specific questions you may have -

Re your new question its not up to you or the person you engage whether they fall into employee or otherwise and you could take them on with a zero contract (but that is not a tax issue but employment law, so I cannot assist furtehr with any questions you may have there - but I can provide this link to a great organisation called ACAS http://www.acas.org.uk/index.aspx?articleid=4468 they are UK law specialists and provide free advise

The fact they are overseas has no bearing at all - and they may be able to have their salary paid free of UK tax on the basis that neither they or the work they perform is conducted within the UK _ but you still would have to treat them as an employee unless you have notification from HMRC that states otherwise, and once they are registered as an employee they could ask for NO Tax status (by completing from P85 -although not all the questions will apply but it gives HMRC the correct information to establish their UK tax status position) on the understanding that they declare this ncome in Canada and pay the tax there - link here for form P85 https://www.gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85

Thanks

Sam

Sam and other Tax Specialists are ready to help you