If you run a Contractor Limited Company it is a good idea to know about Capital Gains Tax and Entrepreneurs Relief. Are you a highly skilled expat Contractor? Would you like to maximise your contract income and work towards a visa extension or visa transfer? If so Commonwealth Contractors can help! To discuss your situation […]
Tag Archives: UK Tax
Life would be far simpler if dividend Income was subject to tax at the same rate as earned income, and you got a personal tax credit for the corporation tax paid by the company before it declared your dividend. Unfortunately, this is not how it works. Instead dividends are taxed at a lower rate than […]
If a Company in which you own shares makes a profit, it will generally be subject to corporation tax on its profit. After allowing for tax, any profit remaining may be distributed to the shareholders in the form of a Dividend. UK taxpayers are liable to personal income tax on dividend income if that dividend […]
In the UK, the taxation of savings interest income is relatively straightforward. The key points are:
National Insurance Contributions (NICs) are payable on employment income (further to Class 1) and self employment income (further to Class 2 and Class 4). Contributions are paid in order to gain entitlements to ‘State Benefits’, including the State Pension and the National Health Service (NHS).
As a Contractor you need to pay Income Tax on (1) PAYE earnings received via an Umbrella Company, OR (2) on Salary and Dividends received via your own Contractor Limited Company.
Billing contract income earned in the UK to an offshore service provider for the purpose of not paying tax is tax evasion regardless of whether or not the person to whom the money belongs is resident in the UK.
If you come to the United Kingdom as a Non-UK Domicile on a temporary work visa using an offshore structure to deal with income arising ‘Outside the UK’ then using an offshore vehicle may be a perfectly legitimate thing to do.
Over the last few years the HM Revenue and Customs have really clamped down on Contractors who choose to structure their income via ‘offshore’ solution providers with the introduction of BN66.
Strictly, you are UK tax resident for the whole of a tax year when you are UK resident for any part of it. But, if you leave or come to the UK partway through a tax year, HMRC operates a concession under which the year may be split (Extra-Statutory Concession A11).