yo…. after another hefty tax bill for 2013 i’m considering what my options are.

i’m in Germany and am essentially a freelancer. i earn enough that that i slip into paying a higher rate of tax, but not enough that if i did have kids that they would be going to private schools. 😉

does anybody have or know about having a Ltd company in the UK that is operated from abroad?

i do not remember ever having to pay so much to the taxman in the UK as i do here in Germany. when operating as a Ltd Co. are you taxed at UK rates, but the monies go to the country in which you operate?

as i understand it, i would need a UK address. this isn’t a problem.
and am i correct in thinking that i would pay NI contributions and still be eligible for health treatment ouside of the UK? if so that would be a massive PLUS for me.

any info would be appreciated…. cheers.

You will still be liable for tax in Germany, as it is where you live and work.

Edit: Here you go – http://www.contractoruk.com/documents/CUK_Contracting_Abroad_Pay_Local_Tax.pdf

sounds like tax avoidance in Germany, at best, evasion at worst – are they hot on these sorts of things?

you will have to pay German taxes. There are reciprocal agreements in place when it comes to tax anyway (another matter), but for our German part of the business we must pay the German taxes.

i’m aware that i will still have to pay tax. just wondered whether there were any benefits to setting up a Ltd Co. in the UK.

i have little problem with tax avoidance. much like many of those in power. except i have few powers other than wheelies and endos.

just wondered whether there were any benefits to setting up a Ltd Co. in the UK.

No.

sounds like tax avoidance in Germany, at best, evasion at worst – are they hot on these sorts of things?

I believe the advice is don’t piss off the finanzamt, they are not nice when they are angry.

i’m aware that i will still have to pay tax. just wondered whether there were any benefits to setting up a Ltd Co. in the UK.

Compared to what?

From what I remember of tax in Germany it’s high unless you’ve deductions, which are generous – so kids, mortgages, pensions etc.

If you’re single etc then it’ll be expensive, but it would also be if you were PAYE (equivalent).

Also really depends on where you ‘earn’ your money and where you live, if it’s Germany – then you’re paying German taxes (see above).

Don’t do it. You’ll end up in a mess. You’ll probably be personally liable to tax in Germany anyway (I doubt they have anything as generous as IR35), plus the UK company you set up (“LtdCo”) will also have a “permanent establishment” there (“PE”) if you’re working for it in Germany it’s probably not got any UK payroll tax/ NI to pay but LtdCo will have German tax to pay on it’s profits from Germany. Follow me so far? Good.

You might not have UK corporate tax for LtdCo if you make the right elections with HMRC but to get money out you’d need to remit it from the German PE to UK head office (simples, relatively), then pay yourself a dividend. That’s probably taxable on you in Germany as well. Some of the tax will be offsettable against other tax but not all of it and if you ever wind things up you’ll have even more fun and games.

have I put you off yet?

Thanks Stu.

Yes, I’m in Munich which has one of the highest business taxes in Germany. Fortunately I’ve managed to stay just below the threshold for the past five years.

And yes, taxes are higher here than in the UK. The GF’s net was around 59% of her gross wage.

The GF’s net was around 59% of her gross wage.

that’s better than the UK once you factor in NI.

^^ is it really!?

Cousin in the UK is on a similar wage and sees over 70% of her gross.