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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 5827
Experience:  FCCA FCMA CGMA ACIS
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Assistant: How can I help? i have a few questions which i

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Assistant: Hello. How can I help?
Customer: i have a few questions which i have been researching for some time and am getting a little confused
Assistant: Have you talked to a tax professional about this?
Customer: not yet just been looking online
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: at the moment my residential status is in Hong Kong and i am considering moving back to the UK. I hold a British Passport. How does that work?

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

Did you originally live in the UK?

Customer: replied 5 days ago.
I have arrived back to the UK on the 11th October 2018 and am still deciding if I want to stay. Does the date of the return also have anything to do with my residency?
I am owner and want to be employed through this company. Also have a dormant company in HK.
a) What do I need to do to get registered and how does the tax work?
b) What is the difference between payroll tax and tax on dividends for me personally?
c) Would I get taxed in both countries?

Yes it does, but you have not answered my original request for information.

Customer: replied 5 days ago.
I used to study and live in the UK. I then moved to HK about 10 years ago.

Right, when you left the UK for HK did you complete a Form P85 and send it to the Inland Revenue as it was then.

Customer: replied 5 days ago.
I don't think I have. Did I have to do that?
Customer: replied 5 days ago.
What if I didn't?

Belt and braces, do so immediately quoting your original departure date. Fortunately there is no time limit as to its submission, it is available on the web and can be filed on line. You will find dealing with HMRC much easier if you comply. You advise HMRC of your return by letter post the P85.

If the company is going to pay you then such emoluments must be through PAYE channels with tax and NI contributions deducted. That will clear the a) hurdle.

b) If you are paid through payroll income Tax and National Insurance are deducted at source and you are paid net. The salary plus deductions are allowable against the company in the Corporation Tax computation. If you are paid through dividends these do not count against the company. You can earn up to 2K per tax year tax free through dividends.

c) You would, but as HK has no Income Tax regime there ia no need to invoke the Double Taxation Treaty between the two countries.

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

Customer: replied 5 days ago.
even if I haven't been working for years does that mean I still have to file the P85. Plus since the set-up of the company I want to research into all this.

It is always a good idea to go through the P85 process otherwise HMRC may try to tax your HK earnings.

You can set up a company through one of the numerous company formation agents, just shop around on the web.

Customer: replied 5 days ago.
The thing is that I am still considering if I want to move back. Do I still have to fill in the P85 right away?

It is always a good idea to get the P85 out of the way.

Customer: replied 5 days ago.
If for example, I wanted to get a part-time job in the meanwhile of my stay would that automatically get me back on the system? And how would that effect my residency?
Customer: replied 5 days ago.
Thank you I will look into your suggestion and get the P85
Customer: replied 5 days ago.
Also how would that work with my tax status?
Customer: replied 5 days ago.
Can I get a part-time or full-time job as my residency is in Hong Kong? For example I would stay for a 3-4months?
Customer: replied 5 days ago.
During that period of time; I decide I don't want to stay and do I then have to fill out the P85 again?
Customer: replied 5 days ago.
Also back to the question about the taxes payed through the company. What is the percentage rate I have to pay in average?

The basic rate in the OL is at 20%. You dod have a oersonal allowance of 11850 to offset that. You would be resident from the date of arrival in the UK.

Customer: replied 5 days ago.
Even if I haven't decided if I will stay here for good?

For starters, yes.

Customer: replied 5 days ago.
That means even without getting a job or setting-up a business. My residency will be UK once I enter the country?

Yes that is how it would start.

Customer: replied 5 days ago.
I see. I thought it will only start once I have a job or have a business set-up.
Customer: replied 5 days ago.
Will definitely take on your advice and get the P85 out of the way.

Thank you. It is presence, not what you are doing which is relevant to residency.

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

Customer: replied 5 days ago.
But would it end once I leave next week? and go back to HK? I still need to fill in the P85 form once I leave right? But since I didn't fill it in 10 years ago and leave this time round. Do I have to fill in two forms?

You complete a P85 every time you leave the UK to be on the safe side..

Customer: replied 5 days ago.
I see. I really didn't know that.
Customer: replied 5 days ago.
Thank you!

Please don't forget my rating.

Post to clear my question list on;e.

Customer: replied 5 days ago.
One more question. If I decide to set-up the business is it better tax wise to activate the dormant company in HK or register a new company in the UK?
Customer: replied 5 days ago.
Will there be a difference?

Easier to re-activate the dormant company.

Customer: replied 5 days ago.
Even if clients are UK based?
Customer: replied 5 days ago.
they have to directly pay into HK business account?

My answer assumed that the dormant company was an UK company.

Customer: replied 5 days ago.
have to ask HK accountant for me to set-up everything. No need for me to look for an accountant here in the UK?
Customer: replied 5 days ago.
Dormant company is in HK.

Why not just start an UK company, makes it easy for everybody.

Customer: replied 5 days ago.
Do I have to get two accountants in two countries then?

No, to run an UK company you can do it yourself, lots of people do.

Customer: replied 5 days ago.
I want to find out all the prospects first before going ahead with one or the other and what's most convenient with low taxes.

Companies are taxed at a flat rate of 19% tax.

Customer: replied 5 days ago.
In all industries?

Yes.

Customer: replied 5 days ago.
In average how long and how much would it cost to set-up a new company here in the UK
Customer: replied 5 days ago.

At the outside half an hour. Most company formation companies offer a Registered Office facility too.

Customer: replied 5 days ago.
Thank you! This is all for today! It was very helpful. Now I think I have to sit down and consider what to do next.

Please don't forget to rate me before you begin thinking!

bigduckontax and 2 other Tax Specialists are ready to help you
Customer: replied 5 days ago.
Doing it right now! Than you again!

Thank you for your support.