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Living in Malta, UK income

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Living in Malta, UK income

Postby JenPrev » Mon 20 Oct 2008 17:09 GMT

Hi there,

I am hoping for some advice :D

I am living in Malta permanently after moving here from the UK in March 2006. I have an online (mostly retail) business, working from home. I do not have a UK residence. I work from my home in Malta. But my income is derived from selling within UK, to UK customers. Does this mean that I have a UK business and that I am liable for UK taxes such as income tax and VAT? I am unsure what consitutes a UK company. Does the fact that I sell to UK people make it a UK company? If yes, how do I go about paying UK taxes? I looked online at the Self Assessment pages but they ask for info like my unique taxpayer reference and my (presumably UK) postcode... but I don't live in the UK so I don't have those things.

Thanks.

Jenny
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Postby gozomark » Mon 20 Oct 2008 17:16 GMT

Hi and welcome to the forum :D

have you spoken to the Inland Revenue non-residents division, or looked at their website ?
http://www.hmrc.gov.uk/nonresidents/

where are the goods shipped from ?
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Postby Mr Kriss » Mon 20 Oct 2008 21:16 GMT

This is very complex, and I strongly suggest you get professional advice.

You may need to think about whether you should trade as a sole trader or use a limited company. You may also need to consider where that company would be resident and how you draw down on profits of that company (salary versus dividends etc.).

Just because your buyers are predominantly located in the UK does not mean to say that your business needs to be based there. You could potentially base your company offshore and still trade in the UK. You would likely be liable for corporation taxes but these could be substantially lower than income tax. As a (presumably) foreign resident of Malta then you could hold over your earnings (or the majority of them) in an offshore account and capitalise them before remitting to Malta so avoid (not evade!) taxes in Malta.

VAT may be another complication but on the basis of scant information, it is difficult to give you any pointers here.

I rarely disagree with Mark, but here I feel I must disagree to a point. The HMRC website will help you understand some of the rules but not help you understand how to abide by the rules to your best advantage. As I said above, this is a complex area and demands good advice. Simply followng HMRC guidance will help you play by the rules but could cost you a fortune.
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Postby gozomark » Mon 20 Oct 2008 21:34 GMT

agree with all you write Chris :D

I would add that very little of this is to do with living in Malta, so there maybe another board elsewhere on this website you can also get advice
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Postby Mr Kriss » Mon 20 Oct 2008 21:46 GMT

The Malta angle comes into it due to the unique way that Malta only taxes foreign residents on income and not capital. This aspect alone provides unique opportunity for maximising profits with 100% legal compliance.

That's the big problem with the UK HMRC website; it cannot make allowances for the different jurisdictions of non residents so it doesn't try to.

Further, I don't think that Jenny can reasonably expect to get detailed useful answers to her situation from any forum, except to say that simply declaring income to the UK for a UK based sole trading operation for a non resident is possibly not the best way forward. Of course it may well be that there is little option for transactions that have already occurred, so here is some general advice to all forum readers.

Taxation planning should start well before you move to Malta (or anywhere else) - don't leave it until until it's too late.
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Postby Kay » Mon 20 Oct 2008 21:59 GMT

I totally agree with Chris and Mark - it is a very complex area. Also if you do set up a UK limited company, there are some quite onerous rules to be complied with such as completing annual accounts, company reports, and corporation tax forms. It's a hassle - we do it every year. It could also be an expensive process if you're not able to do your accounts etc yourself. And I mean company accounts, not just simple book-keeping.

I think you may be confusing the word "business" with "company". If you'd set up a company you'd know about it. You pay for incorporation for starters.


Mark wrote:
... there maybe another board elsewhere on this website you can also get advice...


Possibly on our UK legislation board but we don't have anyone there giving professional financial advice. It's just people like us doing our best to answer from our own experience. Here's a direct link to that board for your convenience:
http://www.britishexpat.com/expatforum/ ... m.php?f=86
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Postby Kay » Mon 20 Oct 2008 22:02 GMT

PS: I was still writing my posting to Jenny while you were posting yours, Chris. Sorry if any confusion arises from that.
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Postby Mr Kriss » Mon 20 Oct 2008 22:20 GMT

No probs Kay.

I would just tend to make it clear to Jenny that there are many options besides running it as a UK business or UK company or LLP or whatever, but that unless she is prepared to detail every facet of her trading here, obtain some advice and then still have to get professional advice (unless willing to chance her future to best intentioned but nevertheless lay advice here), then she can only expect very limited help and may easily end up pointed in the wrong direction.

Decisions about how to set up a business in any jurisdiction is difficult at teh best of times, but when the best route is probably to involve three jusrisdicitons (UK, off-shore and Malta) then it is typically well beyond the fora contributors. We can possibly advise based on our circumstances but these may differ subtly or enormously from Jenny's or any other person seeking advice here. Provided that the enquirer provides fairly detailed information and accepts that any and all information provided to them would need to be verified by a professional (preferably backed up by substantial professional indemnity insurance) for their own situation, then hey, fine, go for it.
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Postby gozomark » Mon 27 Oct 2008 06:16 GMT

just a reminder - no recommendations of advisors should be asked for or offered on the forum, as this impacts the forum's ability to attract advertising from such companies.

However, if you wish to have the name of a highly recommended accountant in Malta, this is available for a contribution of a minimum of € 10 to the running costs if this website. This accountant is used by several people on the forum.
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Postby john07900 » Mon 3 Nov 2008 06:13 GMT

Three important questions you need to establish:

The estimated future turnover
The expected net profits before tax
The personal risk should the business fail in any way

There are many incentives to set up in Malta at the moment, the government have many good sites including these:


http://support.maltaenterprise.net/inde ... /start.htm

http://vat.gov.mt/docs/an_introduction_ ... edures.pdf

http://www.gov.mt/frame.asp?l=2&url=htt ... start.aspx


PS I use the accountant that Mark refers to
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Postby john07900 » Mon 3 Nov 2008 06:21 GMT

mmmmmmm just noticed jenprev made one post on the 20th Oct, since then we have been talking to ourselves!
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